The Securities and Exchange Commission is reportedly investigating Coinbase Global Inc. to see if it allows trading in non-registered securities.
Bloomberg News reported late Monday that regulatory scrutiny has increased after Coinbase increased the number of digital tokens it offers for trading. The report said the investigation preceded a separate investigation into alleged insider trading, in which a former Coinbase executive was indicted last week.
It seems that the same basic problem lies in both cases: the SEC claims that some of the cryptocurrencies offered by Coinbase are securities, while the company claims that they are not. The SEC said last week that nine digital assets traded by Coinbase are actually securities.
“Coinbase does not list securities. End of story,” Coinbase General Counsel Paul Grewal said last week.
Coinbase allows you to trade over 150 digital tokens, many of which are much lesser known than Bitcoin BTCUSD.
and ethereum ETHUSD,
According to Bloomberg, if these tokens were declared securities, Coinbase would have to register with the SEC as an exchange.
Coinbase shares COIN,
down about 73% year to date due to the collapse of the cryptocurrency market as a whole compared to the SPX S&P 500,
17% drop in 2022.