SEC Reportedly Probing Coinbase Over Token Listings

Popular cryptocurrency exchange Coinbase is being probed by the U.S. Securities and Exchange Commission for allegedly listing unregistered securities, Bloomberg reported on 26 July.

The publication cited “three people familiar with the matter”, who said the regulator began investigations on whether Coinbase had allowed U.S. citizens to trade digital assets that should have been registered as securities. Last week, the SEC arrested a former employee of the exchange for alleged wire fraud, and as part of the case called nine crypto assets — seven of which are listed on Coinbase — securities. Coinbase’s chief legal officer, Paul Grewal, today said in a tweet:

Grewal’s statement echoes what Coinbase said in its blog post last week, underlying the fact that its process for listing digital assets had already been reviewed by the SEC, which showed that the “U.S. doesn’t have a clear or workable regulatory framework” for digital asset securities. Coinbase filed a petition for rule making with the SEC on the same day, calling for the regulator to develop actual rules so the crypto market “has a chance to develop”.

Earlier this month, the U.S. Treasury Department called for public comments on the potential risks and benefits of crypto for its upcoming digital asset policy, which could potentially boost the adoption of crypto assets in the country. The move was made in compliance with President Joe Biden’s executive order from March, which directed several U.S. agencies to develop policy recommendations for crypto.