By Shelly Melancon (Switzerland)
Over the past week, the United States Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) have made some arrests.
The three arrested individuals are executives of the U.S.-based crypto exchange, Coinbase. According to reports, the three executives were detained over allegations of insider trading.
However, the arrests led to another round of accusations where Coinbase was charged with listing unregistered securities.
SEC Begins Investigation into Coinbase’s Crypto Listings
The reports from insiders familiar with the case reveal that the regulator has started investigating the crypto firm.
As per Bloomberg’s revelation, sources close to the case disclosed that the regulator had followed Coinbase’s dealings for some time.
Following the crypto market crash, the SEC has stepped up its industry monitoring. Moreover, the bankruptcy of Voyager and Celsius has made the SEC speed up its regulation of the American crypto space.
Additionally, the watchdog is keeping a close tab on the activities of crypto service providers.
Meanwhile, Coinbase has over 150 cryptocurrencies listed on its platform. However, should the SEC conclude its investigation and approve them as securities, the firm must register with the regulator.
According to Coinbase’s legal officer, Paul Grewal, the company has committed no offence. Grewal noted that Coinbase has a procedure to verify all listed digital tokens carefully. The commission’s allegations are baseless because Counbase did nothing wrong, added the legal officer.
Also read:Coinbase Demands Clear Regulations from the SEC
The crypto service provider has called for clearly defined rules to regulate the crypto industry. Coinbase made the demand following its scuffles with the regulator.
However, Coinbase acknowledges that it has been under the radar of the SEC for some time. After publicly announcing its first quarter earnings, Coinbase received a subpoena from the regulator.
The SEC demanded documents and details about some customer offers Coinbase issued to the public. In addition, it also requested information about future products and the company’s yield offers.
Following the broader market collapse, the SEC seeks to expand its grip on the crypto space. It has demanded some additional powers from the U.S. Congress to enable it to pursue other aspects of the crypto regulations.
Despite its seeming drive to ensure compliance, the SEC has come under criticism from both crypto players and lawmakers.
Former CFTC Commissioner Brian Quintenz has accused it of using force to ensure compliance.
Congressman Tom Emmer also digs at the SEC by talking about how it cracks down on crypto firms. Emmer noted that the SEC under its current chairman, Gary Gensler, is power hungry.
The congressman added that the commission uses manipulation to subdue crypto companies to open up to the regulator. The SEC began slamming enforcement actions against them.
For his part, the SEC chair, Gensler, noted that the field is highly volatile, and the agency is doing the right thing to protect investors.
It will be interesting to see how Gensler will carry on with his drive to ensure compliance from crypto players.
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