The United States Securities and Exchange Commission (SEC) urged the crypto asset exchange platform Coinbase to cease trading any other cryptocurrency besides bitcoin before proceeding in early June to sue the company for operating as an unregistered stock exchange, Coinbase CEO Brian Armstrong has revealed.
“We really had no choice at that point. Removing all non-bitcoin assets, which by the way is not what the law says, would have essentially meant the end of the cryptocurrency industry in the US,” he notes. Armstrong in statements to ‘Financial Times’. “Somehow it made it an easy choice … let’s go to court and find out what they say,” he adds.
For its part, the US CNMV indicated to the newspaper that it did not make formal requests for the platforms to remove crypto assets, noting that, in the course of an investigation, staff can share their own opinion on what conduct may raise doubts for the Commission according to securities laws.
The SEC denounced Coinbase at the beginning of June for operating as an unregistered national stock exchange, broker and clearing agency, in addition to also accusing the entity of not having registered its crypto asset service.
The SEC’s complaint, filed in New York’s Southern District Court a day after the one filed against the Binance platform, alleges that, since at least 2019, Coinbase made billions of dollars by “illegally facilitating” the purchase and sale of crypto assets and accuses the platform of relaxing the traditional services of an exchange, ‘broker’ and clearing agency without having registered any of these functions with the SEC, as required by law.
In this sense, the US markets regulator considers that Coinbase’s lack of registration has deprived investors of significant protections, including inspection by the SEC, record-keeping requirements and safeguards against conflicts of interest, among other.
In its complaint, the SEC also alleges that Coinbase’s holding company, Coinbase Global Inc. (CGI), is a control figure of Coinbase and is therefore also responsible for certain violations committed by Coinbase.
(Reference image source: PiggyBank, Unsplash)