The US Securities and Exchange Commission (SEC) has rejected Coinbase, the well-known cryptocurrency exchange, without providing a reason following months of negotiations over the exchange’s registration with the regulatory body. At a House Agriculture Committee hearing, Coinbase’s Chief Legal Officer, Paul Grewal, spoke to Congress about the SEC’s lack of action.
The SEC recently accused Coinbase of violating its registration requirements, which was followed by the company’s dismissal. Grewal briefed Congress that Coinbase and the SEC had a long conversation regarding the registration procedure. The regulatory agency didn’t provide a counterproposal or answer to the corporation, however.
Tuesday morning saw the SEC launch a lawsuit against Coinbase, only one day after doing the same for Binance, another well-known cryptocurrency exchange. The SEC charged Coinbase with operating its platform without the required registrations as an exchange, broker, or clearing agency, according to a news statement.
In addition to the SEC’s proceedings, other US state agencies also looked closely at Coinbase. Investigations into the trade were started by a multi-state task force made up of Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin. The state authorities charged Coinbase with breaking securities laws in their individual states, with Alabama highlighting problems with Coinbase’s staking incentives scheme and failure to register there.
The Alabama Securities Commission’s Director, Amanda Senn, stressed the state’s commitment to safeguarding consumers and investors in the decentralized financial sector. Senn said that action against Coinbase was required to guarantee that buyers of crypto asset products received the same legal safeguards and were properly informed of the dangers involved.
Brian Armstrong, the CEO of Coinbase, replied to the SEC’s accusations on Twitter by denouncing the organization’s “regulation by enforcement approach” and said it was bad for America. Armstrong said that, if necessary, he would use the judicial system to clarify the law.
The accusations and legal proceedings taken against Coinbase and Binance show the regulatory authorities’ increasing attempts to exert control over the quickly expanding cryptocurrency market. The result of these lawsuits will have a big impact on how digital asset exchanges are regulated in the US going forward.