A day after cracking down on Binance, the SEC is now taking aim at Coinbase.
The Commission alleges in a new lawsuit that the crypto exchange failed to register as an exchange, clearing house, and broker despite providing investors these services. The SEC also alleges that Coinbase offered and sold unregistered securities via its staking service.
The agency also claims that Coinbase "made available for trading crypto assets that are being offered and sold as investment contracts, and thus as securities."
Tokens powering Solana, Cardano, Polygon, Filecoin, The Sandbox, Axie Infinity, Chiliz, Flow, Internet Computer, Near Protocol, Voyager, Dash, and Nexo have all been deemed securities by the SEC.
"Coinbase has elevated its interest in increasing its profits over investors’ interests, and over compliance with the law and the regulatory framework that governs the securities markets and was created to protect investors and the U.S. capital markets," today's filing reads.
The SEC also said that the defendants—Coinbase, Inc. and Coinbase Global, Inc.—should be "permanently restrained and enjoined" and no longer able to do business in the United States.
Coinbase shared with Decrypt that the firm is preparing a response to the charges.
In March, the American regulator issued Coinbase with a Wells Notice to indicate that it would soon bring an enforcement action against Coinbase.
A person familiar with the matter told Decrypt at that time that Coinbase leadership is frustrated that the SEC has allowed American investors to participate in crypto for years before "suddenly deciding to pull the rug out."
The SEC sued Binance yesterday for offering unregistered securities and allowing U.S. investors to access Binance.com. It also alleged that Changpeng Zhao, the exchange's CEO, and the exchange misused and commingled customers' funds.
The SEC vs. Coinbase
Today's action comes after a long battle between the crypto exchange and the financial regulator.
In April, Coinbase also took the SEC to court, a judge to compel the agency to provide regulatory clarity around cryptocurrencies. This was after sending the agency a questionnaire that would provide "clarity and certainty regarding the regulatory treatment of digital asset securities" in July 2022.
