The US Securities Exchange Commission (SEC) has filed a 101-page lawsuit against Coinbase, the largest cryptocurrency trading platform in America, just one day after leveling similar charges against Binance.
The lawsuit alleges that Coinbase failed to register itself as a financial intermediary, national securities exchange, or clearing agency, despite performing functions of all three in reality. The SEC also accused Coinbase of violating securities laws by offering assets for trading on its platform that exceeded the Howey Test, despite proclaiming its attention to legal compliance. The commission mentioned that some large-cap cryptocurrencies like SOL, ADA, and MATIC are among those securities.
The SEC asserted that Coinbase prioritized increasing its profits at the expense of investor interests and compliance with the laws and regulatory framework governing securities markets. Additionally, the commission accused Coinbase of not registering its “Stablecoin as a Service” product, depriving investors of crucial information about the program. While Coinbase had anticipated a lawsuit of this nature for months, it remains steadfast in its stance that stablecoin products are not securities.
As part of the settlement measures, the SEC is seeking to recoup Coinbase’s ill-gotten gains and impose a pre-judgment interest on them. This lawsuit follows similar allegations made against the Binance platform. These actions are part of the SEC’s efforts to regulate and monitor the cryptocurrency market and ensure legal compliance.