SEC Sues Coinbase Over Staking Services, Failing to Register

A day after cracking down on Binance, the SEC is now taking aim at Coinbase.

The Commission alleges in a new lawsuit that the crypto exchange failed to register as an exchange, clearing house, and broker despite providing investors these services. The SEC also alleges that Coinbase offered and sold unregistered securities via its staking service.

The agency also claims that Coinbase “made available for trading crypto assets that are being offered and sold as investment contracts, and thus as securities.”

Tokens powering Solana, Cardano, Polygon, Filecoin, The Sandbox, Axie Infinity, Chiliz, Flow, Internet Computer, Near Protocol, Voyager, Dash, and Nexo have all been deemed securities by the SEC.

“Coinbase has elevated its interest in increasing its profits over investors’ interests, and over compliance with the law and the regulatory framework that governs the securities markets and was created to protect investors and the U.S. capital markets,” today’s filing reads.

The SEC also said that the defendants—Coinbase, Inc. and Coinbase Global, Inc.—should be “permanently restrained and enjoined.”

In March, the American regulator issued Coinbase with a Wells Notice to indicate that it would soon bring an enforcement action against Coinbase.

A person familiar with the matter told Decrypt at that time that Coinbase leadership is frustrated that the SEC has allowed American investors to participate in crypto for years before “suddenly deciding to pull the rug out.”

The SEC sued Binance along similar charges, as well as allowing U.S. investors to access Binance.com.

This story is breaking and will be updated soon.