Since Coinbase underwent expansion, it has been under the constant scrutiny of the Security and Exchange Commission of the US.
SEC has filed a complaint against the cryptocurrency exchange platform, stating that—RLY, DDX, AMP, LCX, KROM, POWR, XYO, DFX, and RGT are unregulated securities that are transacted through Coinbase.
On July 26th, reports suggested that the SEC suspected Americans of trading in unregulated digital assets with security concerns through the platform offered by Coinbase. Therefore, the crypto exchange must go through certain investigations now.
Last week, the SEC received information on an insider trading scheme, and all the allegations point their fingers toward Coinbase.
The report further informed us that the product manager of Coinbase Crypto Exchange was convicted by a prosecutor in Manhattan for conducting wire fraud involving insider trading of cryptocurrency on its platform.
Laws from the 1930s couldn’t predict crypto. That’s why we filed a petition to @SECGov to issue securities rules that work for crypto securities and unlock a new market for US consumers, developers, and platforms. @faryarshirzad explains 👇 https://t.co/tauZjN5ZQV
— Coinbase (@coinbase) July 25, 2022
Why is the SEC scrutinizing Coinbase after its expansion?
On July 21st, a while after Coinbase had declared its expansion and released the listings of new cryptocurrencies to be traded on the platform, the SEC began to inspect the crypto exchange.
The SEC also filed a complaint against Coinbase for allowing trading on nine unregistered securities through its platform. But, the legal chief officer of Coinbase –Paul Grewal, has completely denied the allegations imposed on the company by stating that Coinbase has never listed any securities on its platform.
According to the SEC, the nine digital assets listed by Coinbase recently are unregistered securities. But, the DOJ has reviewed the facts but declined to file any securities fraud charges against Coinbase.