US financial market regulators sued Coinbase on Tuesday, alleging that the cryptocurrency platform’s failure to register as a securities exchange put investors at risk.
Filing the lawsuit in US federal court, the Securities and Exchange Commission (SEC) said Coinbase’s failure to register “deprived investors of important protections, including protections from SEC oversight, record keeping requirements and conflicts of interest.” protection against, among others”.
This is a fresh blow to the sector by the SEC, which has taken over the regulation of cryptocurrencies, due to the US Congress failing to define a legislative framework that it considers to be within its jurisdiction.
In the electronic trading market ahead of the opening of the New York Stock Exchange, Coinbase Title lost more than 20%.
The firm did not immediately respond to AFP’s request for comment.
The announcement of this action in a federal court in Manhattan, New York, comes a day after the SEC sued Binance, the first global cryptocurrency trading platform, which was accused of willfully evading regulation. American Customer.
The market watcher pointed against Coinbase for not being registered with the body as an exchange platform and intermediary for cryptocurrency transactions.
By the end of 2022, Coinbase will have 110 million users and $80 billion in assets hosted on its platform.
The Coinbase subpoena comes as Tuesday’s hearing on cryptocurrency regulation before the House Agriculture Committee, whose interests in financial markets stem from commodity agriculture derivatives.
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Among the celebrities appearing is Paul Grewal, Legal Director of Coinbase.
In a statement released Monday ahead of his hearing, the executive called on the US Congress to quickly enact legislation to give the sector visibility.