Coinbase Refutes Allegtions by Securities & Exchange Commission (SEC)
Coinbase has rejected the claims of SEC that were raised against a Coinbase employee for securities fraud. The employee is primarily facing charges including misuse of Coinbase’s classified information (insider trading) in the Department of Justice (DOJ). During the proceeding, SEC filed additional charges against the employee related to securities fraud. SEC claims that nine involved virtual assets are securities.
Response by Coinbase
Coinbase has quickly responded to the claims by SEC and its Chief Legal Officer, Paul Grewal, has explained why these charges are not accurate. Coinbase has negated the charges altogether and claimed that it doesn’t list any securities on the exchange. The official blog of Coinbase has cited the remarks of CFTC Commissioner, Caroline Pham, as well in its justification who has said that it is a striking example of regulation by enforcement.
Related: Coinbase Shuns 60 People Due to Crypto Winter
Disagreeing with the SEC’s claim, Coin base claims that 7 out of the 9 assets mentioned by the commission are listed on the exchange but not a single one of them is securities. The assets we are talking about here include Amp (AMP), Rally (RLY), DerivaDAO (DDX), XYO (XYO), Rari Governance Token (RGT), LCX (LCX), Power Ledger (POWR), DFX Finance (DFX), and Kromatika (KROM).
Coinbase claims that it has a review program through which it scrutinizes every asset before listing it on the platform. Previously, SEC had also reviewed its assets review program. In this review program, it checks whether an asset can be called security and also looks into its compliance with regulations and information security.
Coinbase Files Petition for Rule Making
According to the official blog, it has cooperated with the SEC’s investigation but in return, it has not discussed the issue with the exchange. The exchange has pointed out the lack of regulatory framework for digital assets securities and in this regard, it has filed a petition for rule-making today morning. The exchange states that SEC is not taking interest in rule-making and relying on one-off enforcement actions to bring digital assets into its jurisdiction. Until formal rule-making, Coinbase will continue its review program.
