Coinbase SEC investigation could have ‘serious and chilling’ effects: lawyer

An investigation allegedly launched by the Securities and Change Fee (SEC) into Coinbase’s alleged buying and selling of unregistered securities could have a “serious and crippling impact” on crypto exchanges and token initiatives, according to a authorized expert.

Michael Bacina, an Australian digital assets lawyer at Piper Alderman, told Cointelegraph that the impact on exchanges and initiatives could occur should the tokens eventually be discovered as securities.

“Given that most of the tokens that the SEC has known as securities from their insider buying and selling lawsuits are listed and buy and sell on Coinbase and other exchanges, this investigation could have an impact serious and frightening for each of these exchanges and token initiatives, whether they are or not. no or no final discovery whether the tokens are or are not generally securities.

A Bloomberg report on Monday cited sources as saying the crypto change was under investigation by the SEC to determine whether or not it allowed US buyers to sell goods that should have been registered as securities. .

The report quotes three people “with knowledge of the matter” as saying the investigation is being led by the Securities and Change Enforcement Unit. This is separate from his investigation into an alleged insider buying and selling scheme.

Bacina noted that Coinbase “could face very large fines” or possibly be required to register as a change in the United States due to the investigation.

However, he also noted that “given they have rightly recognized major compliance incompatibilities between blockchain systems and current US market laws, it may be difficult, if not impossible, for its business model current to exist as a licensed and registered change”. .”

“This SEC motion does not appear aligned with encouraging proactive business engagement; Coinbase has a history of excellent religious engagement on regulatory issues and has indicated that the SEC has reviewed its token retail standards.

Bacina noted that fit-for-purpose laws require trading session, transparency and careful attention to hedging issues.

“One of the easiest ways to foster the innovation that blockchain and crypto can bring is clear engagement between regulators and commerce, and clear direction being issued,” he added.

“A CFTC commissioner has rightly called this ‘regulation by enforcement’ and it’s not a great way to provide direction or readability to a rapidly growing and creating business,” he said. he declares.

Coinbase shoots again

Meanwhile, Coinbase continued to deny listing any securities.

Paul Grewal, authorized director of Coinbase, reiterated on July 25 to his Twitter followers that he was “assured” of the platform’s “rigorous due diligence process” that keeps securities off its platform.

He also shared a blog post he authored titled “Coinbase does not list securities. End of Story,” which was first revealed on July 22.

Associate: Cathie Wooden Sells Coinbase Stock Amid Allegations of Insider Buying and Selling

Monday’s survey information coincided with a drop in the value of Coinbase International Inc’s stock, which fell 21% in a single day, according to NASDAQ information.

On Tuesday, the crypto change noticed a A large number of shares dropped by Cathie Wooden’s funding agency, Ark Funding Administration, which sold more than 1.4 million Coinbase (COIN) shares, for just over $75 million, based on Tuesday’s closing price.

Jon J. Epps