The mobile phone icon for the Coinbase app is shown in this photo, in New York, Tuesday, April 13, 2021. The Securities and Exchange Commission is charging Coinbase with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency. (AP Photo/Richard Drew, File)
By Michelle Chapman
Coinbase has been targeted by U.S. regulators in a new lawsuit Tuesday that alleges the cryptocurrency platform is operating as an unregistered securities platform and brokerage service.
The lawsuit from the Securities and Exchange Commission comes only a day after it filed charges against Binance, the world's largest crypto exchange, and its founder Changpeng Zhao are accused of misusing investor funds, operating as an unregistered exchange and violating a slew of U.S. securities laws.
Coinbase shares plunged nearly 15% early Tuesday.
In its complaint, the SEC said Coinbase made billions acting as the middle man for cryptocurrency buyers and sellers but did not give investors lawful protections while acting as a broker.
“Coinbase has for years defied the regulatory structures and evaded the disclosure requirements that Congress and the SEC have constructed for the protection of the national securities markets and investors,” the SEC said in its complaint, which was filed in U.S. District Court for the Southern District of New York. It seeks injunctive relief, disgorgement of ill-gotten gains plus interest, penalties, and other equitable relief.
Coinbase said the SEC has not been transparent in how it regulates cryptocurrencies.
“The SEC’s reliance on an enforcement-only approach in the absence of clear rules for the digital asset industry is hurting America’s economic competitiveness and companies like Coinbase that have a demonstrated commitment to compliance," said Paul Grewal, chief legal officer and general counsel for Coinbase, said in a written statement. The solution is legislation that allows fair rules for the road to be developed transparently and applied equally, not litigation. In the meantime, we’ll continue to operate our business as usual.”
The SEC had warned Coinbase in March that it could face securities charges and had long signaled that Coinbase had been flouting securities laws with its position that cryptocurrencies were not securities and therefore did not need to register as a broker.
“You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: the consequences for the investing public are far too great,” said Gurbir S. Grewal, director of the SEC’s Division of Enforcement, in a prepared statement.
The PGA Tour has announced that it will suspend players that are competing in the LIV Golf event that teed off today. At least 17 players, including names like Phil Mickelson, Dustin Johnson, and Sergio Garcia are banned from the PGA Tour competition. Hilary Fordwich, a business analyst and golf expert, joined Cheddar News to discuss why the PGA had to go this route. This is a threat to the future of golf for them, and there's been many contentions about them not being fair and that this is vindictive," she said. "Don't forget, of course, they represent sort of a monopoly in the history of golf. So you've got two sides to this story. You've got those the purists, those that feel that golf should only be a certain way and that there are only these limited events that the PGA puts on. And then you've got other people who are saying … this is all about money"
Facebook parent Meta officially has changed it’s ticker symbol from ‘FB’ to ‘META’. Paul Meeks, a portfolio manager, Independent Solutions Wealth Management, and a professor of practice in the Baker School of Business at The Citadel, joined Cheddar News to discuss why the tech giant has had to make big changes to its name, its ticker, and its business plans. "When you see what's happening in digital advertising — and there was a slowdown there even before the threat of a recession, which could cause a even more drastic slowdown next year — they had to pivot," he said. Meeks noted he sees Facebook dominating in the metaverse space going forward — whatever that may end up being.
Sports merchandising company Fanatics announced it will be making trading cards featuring college athletes, a deal made possible by the NCAA's change to NIL rules for its players. Anchors Kristen Scholer and Ken Buffa break down the deal for Cheddar.
Catching you up on today’s top business headlines with household wealth falling in Q1 for the first time in two years, Meta officially changing its ticker symbol from ‘FB’ to ‘META’, and updates on Tesla.
The European Union has approved a 40 percent quota for women to sit on company boards. This comes as only 9 of the 27 EU member states have gender equality legislation.
Amanda Victoria, co-founder and CEO of Siponey, joins Cheddar News to talk about the company's canned cocktails. The spritz is made with only four ingredients — wildflower honey, aged rye whiskey, sparkling water, and fresh lemon juice.
