A few years ago, the US Securities and Exchange Commission (SEC) praised Coinbase which is one of the major exchanges. The SEC has praised Coinbase's securities framework and allowed an initial public offering (IPO) to take place in April 2021. Now, the SEC is taking a 'U-turn' step by investigating Coinbase in the issue of unregistered securities listing.
Chairman of the U.S. SEC Gary Gensler has been criticized for his approach to regulating crypto and ignoring previous positions. Gensler believes most cryptocurrencies are securities.
U.S. Securities and Exchange Commission is now reportedly investigating Coinbase for allegedly listing unregistered securities. The SEC claims some of the cryptocurrencies listed by Coinbase are securities. Last week, the SEC found cryptocurrencies to be securities after three Coinbase employees were arrested on insider trading charges.
Coinbase Chief Legal Officer Paul Grewal insisted "Coinbase does not list securities on their exchange". He also said Coinbase has an analysis and review process for listing cryptocurrencies on its platform. The securities process and framework have been previously praised and reviewed by the SEC.
Lawyer and crypto enthusiast John E. Deaton in his tweet on July 26 criticized the SEC's regulatory approach. He said senior SEC staff had previously praised Coinbase for its securities framework but were now investigating the exchange over unregistered securities listings.
Deaton predicts that the SEC will file a lawsuit against crypto exchanges by the end of the year. Coinbase had previously delisted XRP after the SEC filed a lawsuit against Ripple.
The case of Ripple and the SEC is expected to end soon when Judge Sarah Netburn ordered the SEC to hand over the draft of William Hinman's 2018 speech.
