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.
A.I. startup Fractal has raised $360 million in funding, officially entering the unicorn club. Pranay Agrawal, CEO and Co-Founder of Fractal, joined Cheddar News' Closing Bell to discuss what the company plans to do with the fresh capital.
Electric vehicles are quickly becoming an accessible way for consumers to slash emissions as legacy automakers begin to electrify their fleets and world leaders including President Joe Biden push for broad EV adoption. But consumers have concerns about EV range, the availability of charging stations, and more. What if it were both helpful to consumers — and feasible from a climate change standpoint — to keep hybrid models that run on gas on the market? Gill Pratt, CEO of the Toyota Research Institute & Toyota Motor Corporation's Chief Scientist joins Cheddar Climate to discuss his team's research about 'carbon return on investment,' how Toyota is electrifying its fleet, and more.
Fresh off of a $42 million Series B Fundraise, co-founder and CEO of Chapter, Cobi Blumenfeld-Gantz, joined Cheddar to discuss the company's business model and how it will use the capital going forward. He explained that Chapter is a Medicare advisor that searches savings on medical options in order to help users find the right plan for them. "We want to make sure we can help all of our existing members and as many new Americans find the right Medicare coverage, so we're hiring aggressively for the best talent we can," Blumenfeld-Gantz said.
Apple's iMessage has come under fire after a Google executive accused the fellow tech giant of bullying — Android Users. Hiroshi Lockheimer, Google SVP of Android, said that Apple's lack of RCS adoption is holding the industry back while the company uses peer pressure to bolster iMessage.
Fresh off of receiving an innovation award at ShowStoppers @ CES 2022, Iasha King, co-founder of SOLO Secure joined Cheddar to explain how its platforms, the GoSOLO app and the SOLO Backpackpacker device, helps improve personal safety for users. "People just don't know what's going on around them, so it's very important that you're using smart technology to provide them with what's going on," she said. "For example, if there has been an increase in robberies in a neighborhood, that's something that our technology would inform a user."
The Department of Treasury is warning Americans to expect delays on their tax returns this year as the IRS manages staffing shortages due to the pandemic.
