The popular American crypto exchange Coinbase may find itself in a difficult situation in the near future due to the actions of federal regulators.
Source: Pixabay.com
The CEO of this company, Brian Armstrong, on Wednesday, March 22, announced on his Twitter page that the crypto exchange received an official notification from the U.S. Securities and Exchange Commission (SEC) about the inclusion of Coinbase in the list of potential unregistered securities in its suite of products and services for digital assets.
The firm said that potential enforcement actions would relate to aspects of the company’s spot market, the Coinbase Earn betting service, Coinbase Prime and Coinbase Wallet.
Notification of the regulator is not an absolute guarantee of upcoming official charges or lawsuits. But very often such statements in the future become the basis for proceedings at a more serious legal level.
Paxos, a New York-regulated blockchain infrastructure and financial services platform, was recently released. This platform closed its stablecoin product under the Binance brand in response to the SEC notification.
The SEC’s actions and decisions regarding Coinbase have already caused the company’s share placement rewards product to be disabled for the Algorithand crypto token. The CEO of Algorand confirmed this by posting the publication of the relevant content on his Twitter page. He also noted that Coinbase considers its services through the prism of regulatory decisions and coordinates activities in accordance with this factor.
Currently, Coinbase users continue to receive rewards for placing bets on the Ethereum, Cosmos, Tezos, Cardano, and Solana blockchains. This information is published on the official website of the crypto exchange.
Brian Armstrong at the end of February, during the earnings report to investors, said that the company strictly follows the policy of strict compliance with the norms of current legislation in the field of securities handling. He also separately noted that neither the products of the crypto exchange for placing bets nor the USDC stablecoin are securities.
The CEO of Coinbase said that politics is his top priority for this year. This abstract statement can probably be interpreted as a confirmation of the intention to coordinate actions with the requirements of the authorities.
After the news of the SEC notification appeared, the shares of the crypto exchange fell in price by about 12%.
On his Twitter page, Brian Armstrong recalled that two years ago the regulator studied the company’s business in detail and approved the publication of Coinbase. S1 clearly explained the asset listing process and included 57 links to bid placement. He noted that Coinbase conducts a thorough asset verification process and rejected more than 90% of assets that applied for inclusion in the list on the platform.
The crypto exchange is currently considering the possibility of creating a new crypto market outside the United States. This intention is due to the fact that the industry and the government cannot come to a common agreement. Coinbase declares confidence in the legitimacy of the mechanisms for conducting its business.
The last few months have been difficult for the crypto industry due to increased attention from regulators. The community will closely monitor the SEC’s further actions regarding Coinbase. These actions will help to understand under what legal regime crypto firms will carry out their activities in the United States. The current ambiguity provokes tension in the crypto industry.
As we have reported earlier, New York Regulators Crackdown on Binance.
