Coinbase is accused of listing nine crypto asset securities by the U.S.Securities and Exchange Commission (SEC). The SEC accused a former Coinbase employee of violating the anti-fraud provisions of the securities law associated with insider trading. In a complaint filed on Thursday, the SEC described cryptocurrencies such as AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX, and KROM, as unregistered securities.
Responding immediately, Coinbase denied the claims made by the SEC. Paul Grewal, the chief legal officer at the exchange, in a blog published on Thursday noted: “Coinbase does not list securities on its platform. End of story.”
Grewal highlighted that the DOJ reviewed the SEC claim that nine crypto assets listed on the exchange are securities. It decided not to put charges on the parties involved. In addition, Grewal also cited a Commodity Futures Trading Commission (CFTC)’s commissioner’s statement that what SEC is doing is basically regulation by enforcement.
Further, the chief legal officer at the exchange said that they fully disagree with the SEC’s action to levy these securities fraud charges and the details of the charges. While they are in complete agreement with Commissioner Pharm.
The officer then goes on to explain that each crypto asset goes through a rigorous process set by Coinbase. After that only the assets are listed on their platform. The process consists of asset analysis that classifies if the coin is a security. The exchange also takes the asset’s regulatory compliance and information security before proceeding further.
Noting that seven of nine crypto assets mentioned by the SEC in the complaint are listed on the Coinbase platform, he said:
Garewal revealed that Coinbase fully cooperated with the SEC in the insider trading case of a former Coinbase employee. The chief legal officer points out that the SEC directly took legal action rather than first discussing with the exchange about the seven assets on the platform. The officer says this action of the SEC has highlighted a major problem in the U.S which is that the U.S doesn’t have a clear framework on cryptoassests securities. Coinbase has filed a petition urging the SEC to start rulemaking on crypto assest securities.
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