In a significant development for the cryptocurrency industry, the U.S. Securities and Exchange Commission (SEC) has taken legal action against Coinbase, the largest cryptocurrency exchange in the United States. This move comes just one day after the SEC launched multiple charges against another major player in the market, Binance.
The SEC’s 101-page lawsuit against Coinbase alleges that the exchange has neglected to register as a broker, national securities exchange, or clearing agency, despite performing the functions associated with all three roles. This accusation mirrors the claims made against Binance by the regulatory agency. According to the SEC, Coinbase’s failure to register violates regulations that are in place to safeguard investors and maintain market integrity.
Furthermore, the SEC accuses Coinbase of breaching securities laws by allowing the trading of assets on its platform that meet the criteria of the Howey Test, a legal framework used to determine whether an investment qualifies as a security.
In its filing, the SEC has specifically identified 13 altcoins, such as Cardano(ADA), Polygon(MATIC), and Solana(SOL), among others, in a non-exhaustive list. Interestingly, the SEC has completely omitted any mention of Ripple’s XRP, which raises questions and draws attention to its absence.
It is important to note that the SEC is already engaged in a legal battle with Ripple, the entity behind XRP. The regulatory agency has accused Ripple of conducting an unregistered sale of securities involving XRP. The fact that the SEC has overlooked XRP in its recent claim could be attributed to a simple oversight, or it could potentially fuel speculation regarding the ongoing case against Ripple.
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