Coinbase, one of the biggest players in the cryptocurrency sector, saw its share price plummet by up to 17% after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against the company. The SEC claims that Coinbase ran its crypto exchange as an unregistered national securities exchange, broker, and clearing agency, and illegally failed to register its staking-as-a-service program. The lawsuit comes just a day after the agency charged Binance for operating an unregistered exchange and sidestepping trading controls, marking a significant crackdown on major players in the industry.
Read more: Crypto market takes a hit as Binance faces SEC charges
According to reports, Coinbase had long presented itself as a legally compliant player in the crypto sector. However, the SEC argues that the company was fully aware of the applicability of federal securities laws to its business activities but deliberately chose not to follow them. Coinbase’s chief legal officer, Paul Grewal, criticized the SEC’s enforcement-only approach, stating that it is hurting America’s economic competitiveness and companies like Coinbase that have a demonstrated commitment to compliance.
The United States Court of Appeals for the Third Circuit has ordered the U.S. Securities and Exchange Commission (SEC) to clarify its position on a rulemaking petition from Coinbase.
Coinbase’s ongoing battle with the SEC over formal rulemaking in the digital assets sector has taken a new turn. In April, the crypto exchange filed a challenge under the Administrative Procedure Act, seeking to force the SEC to respond to its 2022 petition. Coinbase argued that the current requirements are not suitable for digital assets. Now, the SEC has been given seven days to provide an explanation of its intentions: whether it will decline Coinbase’s request, the reasons for such a decision, or a timeline for making a decision.
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