SEC sues crypto exchange Coinbase

Do you want to FULLY UNDERSTAND the U.S. Securities and Exchange Commission lawsuit against Coinbase? Just read the first 2 sentences of the 101-page-long complaint!

The U.S. Securities and Exchange Commission (SEC) has made it extremely easy & simple for the whole crypto community to understand the lawsuit! Just read the first two sentences:

“Coinbase operates a trading platform (the “Coinbase Platform”) through which U.S. customers can buy, sell, and trade crypto assets. The assets that Coinbase makes available include crypto asset securities.”

I read the whole 101-page-long complaint in detail (so you don’t have to 😃) and the crux of the SEC’s lawsuit is the word “SECURITY”, which appears 220 times!

Same as in the lawsuit against Binance, the main argument is that the tokens listed on Coinbase are “securities”, hence Coinbase has been offering & selling unregistered securities, operating an unregistered securities exchange, clearing agency & broker-dealer.

The SEC explicitly mentions SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, NEXO, AMP, DDX, LCX, OMG, POWR, RLY, and XYO, as “crypto asset securities”.

Finally, Coinbase has been offering Staking as an unregistered security.

Some people are pointing out that when Gary Gensler was confirmed as SEC’s Chairman (on 6th May 2021), he testified to Congress that

“THE SEC DOES NOT HAVE AUTHORITY FROM CONGRESS TO REGULATE CRYPTO EXCHANGES”.

But the argument of the SEC is that those crypto exchanges have listed unregistered securities, so securities laws apply and SEC has oversight!

The US regulator refers to the so-called Howey Test, the US Supreme Court decision in “SEC v. W.J. Howey Co.” which is used to determine what is an investment contract and considered security.

The US regulator is going after the world’s largest crypto companies and there is nothing stopping the nuclear ☢️ crypto winter. Let’s brace ourselves!

#coinbase #sec #howey #lawsuit #crypto #securities #regulator