Security and Exchange Commission (SEC) will investigate Coinbase Global Inc. (NASDAQ:COIN) for listing unregistered securities on its cryptocurrency exchange platform.
According to a Bloomberg article published on Monday, three people with knowledge of the matter said the SEC’s enforcement department is investigating whether Coinbase incorrectly listed tokens that should have been registered as securities.
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The sources also clarified that the SEC investigation began before it named nine crypto tokens as securities in an insider trading lawsuit against a former Coinbase employee and two of his associates.
“Coinbase does not list securities. Pointfinal,” said Coinbase General Counsel. Paul Grewalin a blog post published earlier this week.
According to Bloomberg sources, who asked not to be named, the SEC launched an investigation after Coinbase began to rapidly increase the number of tokens listed on its platform.
Last year, the CEO of Coinbase, Brian Armstrongstated that the firm intended to list all crypto assets where permitted by law.
“But in general, listing on Coinbase should not be taken as an endorsement of this asset (other than meeting our minimum standards),” he said at the time.
According to data from Benzinga Pro, Coinbase’s share price fell 4.58% to $64 on Monday before dropping another 1.9% after the close of trading. Price bitcoin (CRYPTO:BTC) is down 4.08% to $21,072.04 in the last 24 hours.