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 National Highway Traffic Safety Administration has opened a formal investigation into Tesla. The agency is looking into about 580,000 Tesla vehicles, and a feature called 'Passenger Play' which allows drivers to play video games on the center touch screen. The feature previously only worked when a vehicle was in park; but, the NHTSA says it has confirmed that the feature has been available while vehicles are in motion since December of 2020. iSeeCars.com executive analyst Karl Brauer joins Cheddar News' Closing Bell to discuss.
Baron Davis and Kate Hudson want you to bring cannabis home for the holidays. The cannabis-infused seltzer brand Cann released a new spot featuring the actress and former NBA player. The campaign comes hand in hand with Cann's launch of a new holiday bundle, which includes its product with Hudson's King Street Vodka. Davis and Hudson are also Cann investors. Cheddar cannabis reporter Chloe Aiello spoke to Davis about his involvement with the company and its new campaign.
Healthcare workforce management platform ShiftMed
recently announced a $45 million funding round.
The company's platform connects nurses and healthcare professionals to hospitals and other healthcare providers.
ShiftMed's new funding comes amid widespread labor shortages in the healthcare sector. The company's CEO Todd Walrath joins Cheddar News' Closing Bell to discuss.
The S&P closed at a record at the major markets ended Thursday's session higher for a third straight day. Adam Coons, Portfolio Manager at Winthrop Capital Management, joins Cheddar News' Closing Bell, where he discusses what has investors feeling jolly before Christmas, and gifts investors with winning buying opportunities entering 2022.
Jeanenne Tornatore, travel expert, media personality, content creator, and former Orbitz senior editor, joins Cheddar News' Closing Bell, where she runs through items flyers should be mindful of this holiday season as the omicron coronavirus variant continues to spread.
With only two days left until Christmas, last-minute shoppers are facing major issues caused by supply chain shortages and the rising omicron variant. Kristen Gall, president of Rakuten Rewards, joins Cheddar News to discuss.
Supply chain issues have become one of the biggest roadblocks for the U.S. EV market, with production woes likely to stunt the industry's growth in 2022. Rich Steinberg, electric vehicle expert and industry advisor, told Cheddar that the Biden administration investing in domestic mining for essential minerals used in battery manufacturing — such as lithium — could help alleviate the bottlenecks. "Some of those same materials are available domestically, they just haven't been prioritized," he said, noting the paradox between green tech and "dirty" mining. "The good news is that there are ways to extract those materials cleanly."
