The Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase, Inc. and Coinbase Global, Inc. over allegations of trading crypto asset securities on their platform. The complaint alleges that the companies made calculated business decisions to increase their own revenues by offering and selling assets with characteristics of securities.
Coinbase operates a trading platform through which U.S. investors can buy and sell cryptocurrencies such as Bitcoin and Ethereum. The SEC claims that some of the assets such as SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO made available for trading on the platform had the characteristics of securities, thus bringing Coinbase’s operations within the purview of securities laws.
The complaint also alleges that Coinbase’s parent company, Coinbase Global Inc., violated the same Exchange Act provisions as Coinbase since it is a control person of the company. This lawsuit could have significant implications for the future of crypto asset trading in the United States. It highlights the need for companies operating in this space to carefully consider whether their offerings constitute securities under federal law.
