The U.S. Securities and Exchange Commission (SEC) has alleged that nine cryptocurrencies involved in an insider trading lawsuit are actually securities. Coinbase (NASDAQ:COIN) Global Inc (NASDAQ: 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 (CRYPTO: AMP), Rally (CRYPTO: RLY), DerivaDEX CRYPTO: DDX), XYO (XYO), Rari Governance Token (CRYPTO: RGT), LCX, Powerledger (CRYPTO: POWR), DFX Finance (CRYPTO: DFX), and Kromatika (CRYPTO: KROM) 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 (CRYPTO: BTC) was trading at $23,166, up 1% over the last 24 hours. Ethereum (CRYPTO: ETH) was trading at $1,592, up 6.6% and Dogecoin (CRYPTO: DOGE) was trading at $0.069, up 2.3% over the same period.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.