The Securities and Exchange Commission (SEC) is apparently looking into Coinbase, the American cryptocurrency exchange, over the listing of many crypto assets on its website. The probe is looking at whether the exchange has been listing assets that might be considered unregistered securities, according to three people with direct knowledge of the situation.
Coinbase Supposedly Under SEC Review
Leading U.S. cryptocurrency exchange Coinbase is allegedly under more SEC investigation as a result of the growth in the number of tokens listed on its site. The SEC will look into whether the exchange let American consumers to trade cryptocurrency assets that may be regarded as unregistered, according to three persons “familiar with the case.”
The alleged inquiry was started earlier, before another investigation that led to the SEC accusing a former Coinbase product manager, his brother, and his buddy of insider trading. According to the SEC, these acts allowed them to benefit by more than $1.1 million.
In this investigation, the SEC claimed that nine of the cryptocurrencies offered on Coinbase’s platforms—AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX, and KROM—are securities. The chief legal officer of Coinbase, Paul Grewal, has formally refuted these claims, asserting that the exchange does not list securities. Grewal also submitted a petition on July 21 asking the SEC to establish precise guidelines for securities backed by digital assets.
After being affected by the recent decline in the cryptocurrency market, this is only the most recent of the issues that Coinbase is presently dealing with. The firm had to undertake deeper structural adjustments even though the exchange had already declared that it would restrict recruiting in May. In June, the exchange carried out a wave of layoffs that affected 18% of its personnel.
The present so-called “cryptocurrency winter” period the industry is going through and the general macroeconomic conditions are both hurting the price of Coinbase shares on Nasdaq. In June, $COIN was downgraded by Goldman Sachs analysts to a sell recommendation at a price that was 83.78 percent below its all-time high price of $342.98. Analysts at the time suggested the business needed to make “substantial reductions in its cost base.”