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.
Dealmaking surged in 2021 as mergers and acquisitions activity topped $5 trillion. Paul Aversano, managing director and global practice Leader of Alvarez & Marsal's Global Transaction Advisory Group, joined Cheddar to look at how market factors came together to drive the flurry of transactions. "I like to say it's almost a perfect storm for M&A activity," he said. Aversano pointed to a backlog of activity following the slowdown in 2020, "dry powder" unallocated capital in private equity firms, and federal stimulus as some of the reasons behind the burst of changes.
Global delivery service FedEx just received the first five of an order of 500 light commercial electric vehicles from GM's BrightDrop brand. Mitch Jackson, chief sustainability officer for FedEx, joined Cheddar to discuss the deployment of the EV600 delivery vehicles, if the new fleet will get the company to carbon neutrality by 2040, and how cost-effective they might be. "We've been working with electric vehicles for 10 years, and what we've find over that time frame is that we save over half of our operational and maintenance costs with the use of EVs over internal combustion engines, "Jackson said. "So they're economically viable."
A group of shareholders is demanding Amazon run an independent audit to assess how the company treats its employees. Mary Beth Gallagher, the director of engagement at Domini Impact Investments, the group that filed the resolution, told Cheddar it wants to invest in companies that protect shareholders and specifically noted concerns about productivity quotas and employee surveillance. The company's worker safety initiatives have been questioned even before a tornado killed six people at an Amazon warehouse in Illinois this month. "What we want to see is Amazon centering workers' voices and having an independent review that hears directly from workers themselves who know the conditions that they're working under and the pressures they face," she said.
Trip.com is now adding Hopper's price freeze feature for its users. The feature will help travelers save money by protecting them from pricing volatility when booking their next trip. The company is the first online travel agency to partner with Hopper's B2B initiative, Hopper Cloud. Dakota Smith, chief strategy officer at Hopper, joins Cheddar News to walk us through the feature and how the company is addressing Omicorn concerns.
'Spider-Man: No Way Home' caught moviegoers in its web this weekend at the box office. The film premiered at $260 million in U.S. ticket sales, making it the second-best domestic debut of all time and the biggest opening since the pandemic began. Shawn Robbins, chief analyst at BoxofficePro.com, joins Cheddar News to discuss the film's success.
Ahead of the new year, award-winning journalist and TV anchor Soledad O'Brien and financial expert Jean Chatzky are teaming up to launch a brand-new podcast called "Everyday Wealth," aimed at helping listeners unlock their financial potential. O'Brien and Chatzky joined Cheddar's "Opening Bell" to discuss which topics to expect, as well as the importance of financial literacy. "I think what I'm good at is asking uncomfortable questions," said O'Brien, detailing how the podcast might stand out from others. "And sometimes when it comes to talking about money, a lot of those questions are uncomfortable."
Spider-Man is hoping to come to the rescue of movie theaters as they struggle to recover from the pandemic. "Spider-Man: No Way Home" starring Tom Holland is officially out in theaters and is expected to generate a whopping $150 million in its box office debut. Sean O'Connell, managing editor of CinemaBlend, joined Cheddar to discuss his expectations for the new Marvel movie, and what the entertainment industry is doing to prepare for a potential winter surge in COVID cases.
As companies figure out how to adapt to the ever-changing COVID world, mergers and acquisitions are on the rise. A new report from PwC reveals 2021 saw the most megadeals, transactions of at least $5 billion, in the U.S. Colin Wittmer, PwC's U.S. deals leader, tells Cheddar how companies can set themselves up for deals success.
The last year saw a massive uptick in CEO turnover, with over 1,200 chief executives leaving their posts in 2021. According to a recent report from Challenger, Gray & Christmas, the main reasons cited were talent management, retention, hiring, and reimagining the workplace post-covid. Andrew Challenger, Senior Vice President, Challenger, Gray & Christmas, Inc. joined Cheddar's Opening Bell to discuss.
