Just days after slapping charges of insider trading against two former Coinbase product managers and two other people, the US Securities and Exchange Commission (SEC) is now investigating if the cryptocurrencies listed on the exchange are securities.
- Citing sources familiar with the matter, Bloomberg reported that the latest probe predates the SEC’s investigation into the alleged insider trading scheme.
- Coinbase’s legal head Paul Grewal said that the team is looking forward to engaging with the enforcement.
“We are confident that our rigorous diligence process – a process the SEC has already reviewed – keeps securities off our platform.”
- In recent months, Coinbase has significantly boosted its token offerings, and the current figures stand at over 150. If the SEC manages to deem those tokens as securities, the exchange would require to register with the regulatory watchdogs.
- In a landmark indictment for insider trading in the crypto industry, a former Coinbase manager – Ishan Wahi – along with his brother and a third individual, was arrested on Jul 21.
- During this time, the SEC clashed with Coinbase over tokens such as ENS, GALA, POWR, and ALCX and classified them to be securities. However, the DOJ and the CFTC do not appear to be in agreement with the SEC’s statements.
- CFTC Commissioner Caroline D. Pham said that the move to investigate nine tokens mentioned in the indictment as securities could potentially have “far-reaching implications for future legal disputes and consumers alike.”
- Coinbase has previously asked the SEC to develop a framework for digital asset securities.