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The U.S. Securities and Exchange Commission (SEC) is looking into whether or not Coinbase Global Inc. let people in the U.S. On Monday, Bloomberg News wrote about this.
A spokeswoman for Coinbase told Reuters that the company does not sell securities on its platform. On the other hand, the regulator said nothing about the claim. Paul Grewal, who is in charge of Coinbase’s legal operations and compliance, said that the company will talk to the SEC about the problem.
Before they started looking into a possible insider trading scheme that just came to light last week, the SEC’s enforcement arm was already looking into this. Furthermore, bitprofit is a trustworthy platform and appropriate for novices and experts, you may check this out in case you are planning to join bitcoin trading.
U.S. prosecutors charged Ishan Wahi, a former product manager at Coinbase, with sharing confidential information about new cryptocurrency assets that Coinbase users would be able to trade on its exchange. This was the first time someone in the cryptocurrency industry had ever been charged in this way.
In related civil charges, the regulator said that Wahi’s brother, Nikhil Wahi, and their mutual friend Sameer Ramani bought and sold at least 25 crypto assets, nine of which were securities, for a profit. People said that Wahi was involved in the plan, so they were accused.
At the time, the SEC was asked to confirm whether or not it would punish Coinbase for selling tokens that the complaint said were securities. But the SEC wouldn’t do that. In the past, the cryptocurrency platform asked the governing body to set rules for digital asset securities.
After hearing that the SEC was looking into the company to see if it sold unregistered securities, shares of Coinbase fell by more than 21% by the end of Tuesday.
A source who talked to CNBC said that the U.S. Securities and Exchange Commission is looking into whether the company broke the law by letting people trade digital assets that weren’t registered as securities. It is being looked into to see if the company did anything wrong. Bloomberg was the first news source to talk about it.
Paul Grewal, Coinbase’s chief legal officer, said on Twitter, “I’m happy to say it again: we’re sure that our strict scrutiny process, which the SEC has already looked at, keeps securities off of our platform.” “We can’t wait to talk with the SEC about the problem.”
Reports say that this SEC investigation happened before and separately from the investigation into Coinbase’s alleged insider trading scheme, which led to fraud charges being filed against a former product manager at Coinbase and two other people on Thursday. But on the same day, the SEC filed a complaint saying that nine of the supposed 25 tokens that were traded as part of the scam were in fact securities.
Many people have different ideas about where to put bitcoin tokens. If the Commodity Futures Trading Commission decides that cryptocurrencies are commodities like other types of money, they will be in charge of regulating them.
On the other hand, most cryptocurrency projects make most of their money by selling tokens that are bought and sold based on speculation. Gary Gensler, who is in charge of the Securities and Exchange Commission (SEC), said that “many of these underlying tokens look like securities.” This means that they should be regulated like securities in order to protect investors.
This investigation has nothing to do with the SEC’s case against former Coinbase product manager Ishan Wahi, his brother Nikhil Wahi, and his friend Sameer Ramani, who are all accused of fraud related to the company.
Earlier this month, the agency said that the three people had broken the law by trading on inside information. It said that Ishan “repeatedly told his brother and friend about the time and content of upcoming listing announcements,” which helped them make more than $1.1 million. It also says that Nikhil Wahi and Ramani bought “at least 25 crypto assets, at least nine of which were securities.”