The US regulator, the SEC, filed a lawsuit against Binance for “offering unregistered securities” on Coinbase, another major Bitcoin exchange, shortly after its accusations.
The SEC also sues the second-largest Bitcoin exchange
As you follow on Kriptokoin.com, on June 5, the SEC sued Binance and its CEO, CZ, for violating federal securities laws.
In the second move, which emerged recently, New York-based crypto exchange Coinbase is being sued for offering unregistered securities.
Today we charged Coinbase, Inc. with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency and for failing to register the offer and sale of its crypto asset staking-as-a-service program.https://t.co/XPG2gDkxtV pic.twitter.com/hCdVMw8B2v
— U.S. Securities and Exchange Commission (@SECGov) June 6, 2023
The SEC lawsuit alleges that Coinbase had never registered as an exchange, national stock exchange, or clearinghouse, evading a disclosure scheme for the securities markets. In the announcement, several altcoins offered by the crypto exchange claimed securities, including Solana (SOL), Cardano (ADA), Polygon (MATIC) Filecoin (FIL), Sandbox.
Axie Infinity, Chiliz (CHZ), FLOW, ICP, NEAR, VGX, DASH and NEXO are other altcoins declared as securities along with the Coinbase lawsuit.
SEC also targets Coinbase’s staking services
The US regulator claims that Coinbase has been conducting an unregistered offering of securities through its staking program since 2019, allowing customers to earn profits by participating in the “proof-of-stake” mechanisms of certain blockchains.
Under this program, Coinbase pools customers’ stakeable cryptocurrencies, validates blockchain transactions, and then splits a portion of the rewards with participating customers. However, according to the SEC, Coinbase did not legally register offers and sales of this program as required by securities laws.
The lawsuit also alleges that Coinbase has been operating as an unregistered securities broker since 2019, nearly two years before its April 2021 initial public offering (IPO).
Gary Gensler expressed his concerns over the alleged failure of the Bitcoin exchange to comply with securities laws
While addressing the latest Coinbase lawsuit, SEC chairman Gary Gensler claimed that the crypto exchange deprived its customers of critical protections that prevent fraud and manipulation and avoided appropriate disclosure and safeguards against conflicts of interest.
Gensler also stressed the importance of separate functions in the securities markets, stressing that Coinbase’s actions deprive investors of significant protections against fraud, manipulation and inadequate disclosure.
Gurbir S. Grewal, Director of the SEC’s Enforcement Division, stated that Coinbase specifically disregarded the applicability of federal securities laws to its business operations. However, he claimed that Coinbase’s deliberate refusal to abide by the rules allowed the company to make substantial profits at the expense of investors who were deprived of the protections they deserved. The SEC’s enforcement action seeks injunctive relief, distribution of ill-gotten gains, penalties, and other equitable remedies.
SEC has designated these 61 altcoins as securities
With altcoins labeled as securities under the Coinabase and Binance lawsuits, the SEC’s list has reached 61 cryptocurrencies:
- Cardano [ADA]
- Left [LEFT]
- Binance Coin [BNB]
- Binance USD [BUSD]
- Polygon [MATIC]
- The Sandbox [SAND]
- Axie Infinity [AXS]
- Decentraland [MANA]
- COTI [COTI]
- Cosmos [ATOM]
- XRP
- Telegram’s Gram (TON)
- LBRY Credits (LBC)
- OmiseGo (OMG)
- DASH (DASH)
- Algorand (ALGO)
- Naga (NGC)
- Monolith (TKN)
- IHT Real Estate (IHT)
- Power Ledger (POWR)
- Chromatica (CHROM)
- DFX Finance (DFX)
- Amp (AMP)
- Rally
- Rari Governance Token (RGT)
- DerivaDAO (DDX)
- XYO Network (XYO)
- Liechtenstein Cryptoasset Exchange (LCX)
- KIN (KIN)
- Salt Lending
- Beaxy Token (BXY)
- DragonChain (DRGN)
- Tron (TRX)
- BitTorrent (BTT)
- Terra USD (UST)
- Luna
- Mirror Protocol (MIR)
- Mango (MNGO)
- Ducat (DUCAT)
- Locke (LOCKE)
- Ethereum Max (EMAX)
- Hydro (HYDRO)
- BitConnect (BCC)
- Meta 1 Coin (META1)
- Filecoin (FIL)
- BNB (BNB)
- Binance USD (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Axie Infinity (AXS), COTI (COTI), Paragon ( PRG) and AirToken (AIR).
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