COINBASE GETS SUED BY THE SECĀ šŸ„Š

Gary Gensler and the #SEC armyĀ have been working overtime.

First it was Kraken. Yesterday there was a bombshell lawsuitĀ against #Binance. And today they are targeting Coinbaseā€¦ again.

source: cryptopm

Itā€™s a 101-page lawsuit, but say it with me ā€œnever let a Roader read more than 1 pageā€. So, we did all the reading for you.

Hereā€™s what the SEC is saying:

  • Coinbase has been operating a non-registered securities exchange.Ā Even though they arenā€™t willing to provideĀ guidanceĀ on complying with regulationā€¦

  • They have been acting as an unregistered broker. A broker helps investors buy and sell securities. So if the SEC thinks Coinbase is listing securities, then they also think that Coinbase is helping users buy and sell securities.

  • Coinbase is an unregistered clearing agency.Ā Similar to brokers, clearing agents are involved in the process of exchanging securities. They make sure that deals happen on time and both parties stick to their end of the bargain.

  • They didnā€™t register the offer and sale of their staking program. After targetingĀ Krakenā€™s staking service, it only makes sense that Coinbase would be next in line.

The crazy part?Ā The SEC also claims that Coinbase has been breaking the rules since 2019.

But the SEC is the same entity that approved Coinbase to go public in 2021 when many of these ā€œsecuritiesā€ were already tradeable.

And the U.S. government is no stranger to the platform. Theyā€™ve been using Coinbase to sell confiscated Bitcoin and will continue to throughout the year.

As if things couldnā€™t get worse, 10 state security regulators have formed a task force to support the SECā€™s initiative.

These states issued a Show Cause Order saying that their local residents have been given staking rewards through an unregistered offering. Coinbase has 28 days to respond.

Hereā€™s how the markets reacted:

  • Coinbaseā€™s stockĀ opened the trading day down ~20%, but slightly recovered to close down 12%

  • #$BTC Ā dipped slightly on the news release but bounced back to rally over 5% in the following hours

  • #$ETH Ā followed in Bitcoinā€™s footsteps, jumping ~4% in the hours after

Here are some of the responses from #Twitter:

that's it for today, let me know your thoughts in the comment section

thanks for reading.