Claim $500Coinbase Lashes Out At SEC Over Securities Fraud Charges, Claims No Wrongdoing
On Thursday, July 21, The U.S. Attorney’s Office and The U.S. Securities and Exchange Commission (SEC), accused three Coinbase executives of insider trading. The agencies said that the insiders used confidential Coinbase information of future token listing and profited from it.
Interestingly, the U.S. SEC has further accused Coinbase of involving in securities fraud. The SEC noted that at least nine of the assets to be listed were “securities”. Coinbase’s Chief Legal Officer, Paul Grewal, has issued a sharp response to the SEC in a blogpost titled “Coinbase does not list securities. End of story“.
Grewal said that while the SEC claims nine assets to be “securities”, the DoJ has reviewed the fact of the crypto assets and chose NOT to file securities fraud charges in this matter. Furthermore, he quoted CFTC Commissioner Caroline Pham who said that this is a “striking” example of “regulation by enforcement” by the SEC.
Coinbase says that there’s no substance in the SEC charges of securities fraud and 100% disagrees with the agency. In the blogpost, the Coinbase chief legal officer noted:
Seven of the nine assets included in the SEC’s charges are listed on Coinbase’s platform. None of these assets are securities. Coinbase has a rigorous process to analyze and review each digital asset before making it available on our exchange — a process that the SEC itself has reviewed.
SEC Jumping to Litigations
Coinbase accused the SEC of directly jumping to litigations on the “securities fraud” matter. Coinbase said that it is completely ready to cooperate on the insider trading charges by the DOJ.
Coinbase said that with the SEC rushing to file the securities fraud charges, this puts a spotlight that the “US doesn’t have a clear or workable regulatory framework for digital asset securities”. Grewal further noted:
Instead of crafting tailored rules in an inclusive and transparent way, the SEC is relying on these types of one-off enforcement actions to try to bring all digital assets into its jurisdiction, even those assets that are not securities.
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