The US Securities and Exchange Commission (SEC) is preparing to take formal action against the largest American cryptocurrency exchange, Coinbase, for selling unregistered securities.

According to Coinbase’s report to the SEC, the latter has warned of violations of federal securities laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934, related to the exchange’s main business and other services.

The expected formal action, which includes measures such as trading bans and civil penalties, is likely to demand financial remedies and compensations when it occurs. Similar actions were taken against Paxos, the issuer of a stablecoin called BUSD, which received a Wells Notice last month.

The SEC had previously cautioned Coinbase about planned products, investigated its listing process, and imposed a fine on its competitor Kraken when it offered a similar cryptocurrency lending service.