Coinbase Global Inc., a publicly listed crypto company that’s among the largest cryptocurrency exchanges in the crypto industry, is reportedly facing renewed scrutiny from the US Securities and Exchange Commission (SEC) over allegations of listing crypto tokens that fall under securities.
A report by Bloomberg on Tuesday, and which cites sources privy to the developments, says the probe predates recent events around insider trading charges against a former Coinbase employee.
However, while the agency has been monitoring the listing of tokens on the leading crypto exchange, scrutiny has increased ever since the US-based company moved to add more tokens on its trading platform.
Coinbase maintains it doesn’t list securities
The SEC last week noted in its insider trading charge against the former Coinbase manager and two other individuals that nine of the tokens involved were securities.
Coinbase, which offers access to over 150 tokens on its trading platform, responded to the securities regulator’s allegations by noting that although seven of the tokens highlighted in the insider trading case are listed on the platform, none is a security.
The company’s Chief Legal Officer Paul Grewal reiterated this in a statement shared in a blog post on 22 July, saying the exchange disagrees 100% with SEC’s view and allegations. He also repeated the stance on Tuesday as the probe report surfaced.
Grewal says Coinbase is ready to engage the regulator.
I’m happy to say it again and again: we are confident that our rigorous diligence process—a process the SEC has already reviewed—keeps securities off our platform, and we look forward to engaging with the SEC on the matter. A refresher: https://t.co/SaacvrZEiU
— paulgrewal.eth (@iampaulgrewal) July 26, 2022
Coinbase (COIN) shares declined sharply premarket on Tuesday, falling by more than 5% amid similar declines for Bitcoin.