The SEC's
case against Coinbase, its second assault on a major cryptocurrency exchange in two days, accuses the San Francisco biz of operating as a national securities exchange, broker, and clearing agency without having gone to the SEC to be licensed as such. Unsurprisingly, that's a no-no. "Coinbase's alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC," SEC chairman Gary Gensler said. Coinbase also offered cryptocurrency staking-as-a-service, in which it pools the cryptocurrency of multiple investors to validate proof-of-stake cryptocurrencies including Ethereum. The SEC isn't happy about that because Coinbase did so without registering its staking service as a security offering, it is claimed.
Unlike in the Binance case the SEC announced yesterday, the commission isn't alleging outright malfeasance by Coinbase officials - only that it selectively ignored rules. "While Coinbase's calculated decisions may have allowed it to earn billions, it's done so at the expense of investors by depriving them of the protections to which they are entitled. Today's action seeks to hold Coinbase accountable for its choices," said SEC Division of Enforcement director Gurbir Grewal.
www.theregister.com
