After Binance, it is the turn of the Coinbase exchange to suffer the wrath of the SEC.
Gary Gensler responds to Brian Armstrong…
Like Binance, the SEC accuses Coinbase of failing to register a myriad of securities law assets.
Coinbase is the largest exchange in the United States with over 108 million customers. The daily trading volume reaches billions of dollars when it comes to bitcoin.
“Coinbase has never registered with the SEC as a broker, thus evading the transparency rules that Congress established for securities markets”can we read in the complaint.
Coinbase is accused of offering the unregistered securities SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH and NEXO.
Staking services are also targeted:
“Coinbase has been offering its staking program to American investors since November 2019. This service makes it possible to participate and benefit from the “proof-of-stake” consensus mechanism of the Tezos blockchain. Today, staking services include five different assets: XTZ (Tezos), ATOM (Cosmos), ETH (Ethereum)ADA (Cardano) and SOL (Solana). […] Coinbase pools assets provided to Coinbase by investors through its staking service […]then takes care of collecting the returns […] that Coinbase distributes after paying itself a 25% or 35% commission. »
We can read further in the complaint:
“Starting around March 2023, Coinbase encouraged investors to stake their ETH with the Coinbase Staking Program to “earn 4.07% APY (annual rate of return) on all their ETH staked,” in addition to a 10% bonus for a stake of at least $100 in ETH. »
Problem, staking is considered a contract under the law on securities. But Coinbase has never registered its services with the SEC.
Coinbase’s ETH staking service currently holds over 19 million ETH. The SEC makes it clear that these exorbitant fees should go back to Coinbase customers.
Overall, the facts are less serious than in the case of Binance. But the complaint is still 100 pages, compared to 160 pages for Binance.
“You just can’t ignore the rules because you don’t like them or because you’d prefer different ones. The consequences for investors are far too great”says Gurbir S. Grewal, director of the SEC’s Enforcement Division.
And if things weren’t clear enough, Gary Gensler told CNBC that “we don’t need more digital currencies”.
Bad times for shitcoins…
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