• The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase alleging multiple securities law violations.
• The SEC claims that Coinbase operated as an unregistered broker, exchange, and clearing agency and offered unregistered securities via its Staking Program.
• This comes a day after the SEC filed similar charges against Binance for similar securities laws violations.
SEC Files Lawsuit Against Coinbase
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase, America’s biggest cryptocurrency exchange, for allegedly breaching securities laws. The regulator claims that Coinbase operated as an unregistered broker, exchange, and clearing agency and offered unregistered securities via its Staking Program which exposed investors to significant risk without legal compliance or prioritizing investor interests over profits.
SEC Also Files Charges Against Binance
This lawsuit comes a day after the SEC filed similar charges against Binance for similar securities laws violations. Both exchanges face stiff penalties if found guilty with fines of up to $10 million per violation in addition to jail time depending on the severity of the case.
Market Reactions To Lawsuits
The news triggered a selloff in Coinbase’s stock with COIN falling 15%. Meanwhile decentralized exchange trading volume has grown 88% following the lawsuits – likely due to users seeking out safe havens outside of more regulated exchanges like Coinbase and Binance.
Gensler Confident In Securing Win
Former Chairman Gary Gensler said he was “very confident” that the SEC could win their case against both exchanges. This is due to their previous successful cases taken against various crypto companies such as Ripple Labs for which they secured a settlement of $1 billion last year from all defendants including XRP creator Jed McCaleb who was ordered to pay $15 million in disgorgement alone alongside other defendants who paid penalties totaling $600 million combined .
Genesis Granted Plan Extension & FTX Can’t Take Part In Mediation
Lastly , Genesis Global Trading Inc., one of the world’s largest digital currency liquidity providers , was granted an extension on its plan while judge Sarah Netburn ruled that crypto derivatives platform FTX cannot take part in mediation hearings involving Ripple Labs‘ dispute with R3 .