Cryptocurrencies, all the troubles of Coinbase
The U.S. Securities and Exchange Commission (SEC) has threatened to sue Coinbase Global over some of the cryptocurrency exchange platform's products. Down the title of the exchange on Wall Street
The threat of legal action by the SEC sends Coinbase, the largest US trading platform for cryptocurrencies, plummeting to Wall Street.
Coinbase Global is in sharp decline on the Stock Exchange (-11.4% in the pre-market on Wall Street and -17.8% on the Global Equity Market of Piazza Affari). Yesterday, the company received formal notification that the Securities and Exchange Commission (SEC), the American Consob, intends to initiate legal action against the company since it has identified potential violations of the law on securities.
The SEC has stepped up its crackdown on the cryptocurrency industry since Sam Bankman-Fried's FTX implosion, which left investors facing billions of dollars in losses last year. In particular, at the center of the notice from the US authority are the staking service (i.e. the earning of a reward for holding a crypto asset for a certain period of time) Coinbase Earn, Coinbase Prime and Coinbase Wallet, according to what reported by the company itself. “We note the situation with disappointment, and we are absolutely confident in the legitimacy of our service and activities,” said Coinbase chief legal officer Paul Grewal.
The story also had repercussions on the main cryptocurrencies: Bitcoin dropped 2.1% to $27,631 and Ethereum 2% to $1,757, reports Radiocor .
All the details.
THE NOTIFICATION FROM THE SEC THAT CAUSED THE COLLAPSE OF COINBASE
The United States Securities and Exchange Commission (SEC) could file a lawsuit against Coinbase. In a note, the San Francisco-based company announced it had received a notice from the commission — a formal notice that often precedes legal action against the recipient.
More specifically, Coinbase has announced that it has received the so-called "Wells Notice", which concerns parts of the platform, including the segment of listed digital assets and Coinbase Earn and Coinbase Wallet services. The "Wells Notice" is an official communication issued at the end of an investigation and heralds legal action, but gives companies time to clarify their position and respond to the allegations. "A Wells Notice doesn't always incur a charge or signal that the recipient has violated a law," Reuters points out.
THE LOCATION OF THE CRYPTOCURRENCY PLATFORM
Therefore, Coinbase has let it be known that its products and services will continue to operate without interruption. “We are prepared for this disappointing situation and have confidence in the legality of our assets and services,” Coinbase Chief Legal Officer Paul Grewal said in a statement, underlining that “if necessary, we are ready to initiate a legal process to clarify that we have always supported and to demonstrate that the SEC was simply not fair or reasonable in approaching digital assets”.
According to the platform, the SEC would have identified "a series of possible violations", without providing further details on the matter.
THE TURN OF THE SCREW OF THE SEC
The chairman of the SEC, Gary Gensler, has repeatedly stated that many of the tokens and products offered by companies operating in the cryptocurrency segment are in effect securities and therefore trading platforms are required to register with the authority.
Under Gensler's direction, the regulator has issued enforcement actions against several heavyweights, including Gemini, Genesis, TRON executive Justin Sun, Do Kwon and cryptocurrency exchange Kraken, CNBC recalls.
Separately, the SEC is suing cryptocurrency mogul Justin Sun for allegedly violating securities rules and charged eight celebrities, including actress Lindsay Lohan, with illegally promoting his crypto assets.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/criptovalute-tutti-i-guai-di-coinbase/ on Thu, 23 Mar 2023 15:13:38 +0000.