The U.S. Securities and Exchange Commission (SEC) has alleged that nine cryptocurrencies involved in an insider trading lawsuit are actually securities. Coinbase Global Inc COIN said it “does not list securities on its platform. Period.”
What Happened: On Thursday, a former Coinbase employee and two others were arrested on charges of insider trading.
The SEC found the charged individuals guilty of front-running token listings and generating illicit profits worth $1.1 million. At least nine of the 25 crypto assets involved were “securities,” the regulator said.
The official court filing named Amp AMP/USD, Rally RLY/USD, DerivaDEX CRYPTO: DDX), XYO (XYO), Rari Governance Token RGT/USD, LCX, Powerledger POWR/USD, DFX Finance DFX/USD, and Kromatika KROM/USD as the nine Coinbase-listed crypto assets in question.
Coinbase Chief Legal Officer Paul Grewal vehemently denied the SEC’s charges in a blog post titled “Coinbase does not list securities. End of story.”
We “respectfully, 100% disagree with the SEC’s decision to file these securities fraud charges and the substance of the charges themselves,” said Grewal.
“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,” he added.
The Coinbase executive said that the charges highlighted an important problem for digital assets in the U.S. — the lack of a clear regulatory framework.
“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,” said Grewal.
Price Action: Coinbase shares fell 2% after-market, according to data from Benzinga Pro.
At press time, Bitcoin BTC/USD was trading at $23,166, up 1% over the last 24 hours. Ethereum ETH/USD was trading at $1,592, up 6.6% and Dogecoin DOGE/USD was trading at $0.069, up 2.3% over the same period.
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