Coinbase (COIN) Stock Sinks After Bloomberg Report of SEC Investigation

Coinbase Global (NASDAQ: COIN) is facing increased scrutiny from the US Securities and Exchange Commission (SEC) after reports that the digital asset exchange might have improperly allowed investors to trade assets that should have been registered as securities, according to Bloomberg.

The move comes shortly after Coinbase added new tokens to the platform and SEC’s probe into an insider trading scheme that resulted in a lawsuit against a former Coinbase manager and two other individuals.

The U.S. regulators’ crackdown on digital assets has intensified over the past few months amid a severe crypto winter that sent numerous cryptocurrencies to multi-year lows. The SEC has been particularly keen on regulating digital assets and trading platforms.

Coinbase, which lists more than 150 tokens on its platform, would have to register as an exchange with the SEC if these tokens were considered securities. The company has criticized the SEC several times for its view of the industry and urged the agency last week to come up with clearer rules.

Last week, the SEC filed securities fraud charges against a former Coinbase employee and two other people, accusing them of insider trading practices. While the regulator did not charge Coinbase itself, it had determined in its lawsuit that the traded digital assets were securities.

Coinbase responded to the SEC’s charges in a blog post dubbed “Coinbase does not list securities. End of story.” The company said it “100% disagrees with the SEC’s decision to file these securities fraud charges and the substance of the charges themselves.”

“Seven of the nine assets included in the SEC’s charges are listed on Coinbase’s platform. None of these assets are securities. Coinbase has a rigorous process to analyze and review each digital asset before making it available on our exchange — a process that the SEC itself has reviewed,” it added.

By Senad Karaahmetovic

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