US sues Coinbase as crypto crackdown widens

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The Securities and Exchange Commission says the company has not followed financial rules.

Coinbase staff in New York ahead of the crypto firm's listing on the Nasdaq in 2021

The regulator said that had allowed the firm to escape oversight, including guards against conflicts of interest."The solution is legislation that allows fair rules for the road to be developed transparently and applied equally, not litigation," said Paul Grewal, Coinbase's chief legal officer. "In the meantime, we'll continue to operate our business as usual.

On Tuesday, financial regulators from 10 states, including California and Alabama, also filed legal actions alleging that Coinbase was operating as an unregistered securities dealer. The firm fetched a market value of nearly $100bn when it listed on the stock exchange in 2021 at the height of the crypto frenzy.

In March, Coinbase had warned that the SEC might take legal action against the firm. At the time, it called the development disappointing and said it had been working with authorities to try to register, but that there was no clear path for crypto firms to do so. It has also threatened to relocate out of the US to London or elsewhere.

 

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