The Securities and Exchange Commission (SEC) has taken legal action against Coinbase, the largest cryptocurrency trading platform in the United States. The SEC alleges that Coinbase operated as an unregistered national securities exchange, broker, and clearing agency, going against the traditional separation of these roles in securities markets.
According to the SEC, Coinbase’s failure to register has deprived investors of certain protections. These protections include SEC inspections, safeguards against conflicts of interest, and recordkeeping requirements. The agency argues that Coinbase does not qualify for any exemptions from registration for any of these functions. It further accuses the company of unlawfully facilitating the buying and selling of crypto asset securities and making billions of dollars from transaction fees since at least 2019.
