According to a Bloomberg story, the US Securities and Exchange Commission (SEC) is looking into Coinbase for inappropriately enabling trading in a number of tokens that ought to have been registered as securities.
Since a former employee and two of his accomplices were detained last week on suspicion of wire fraud, Coinbase has been the target of the regulator’s attention. If the alleged offense includes securities, the SEC also filed a complaint charging insider trading, which falls under its scope. But according to Bloomberg, which cites unidentified sources, the SEC’s enforcement probe against Coinbase predates the agency’s investigation that resulted in the insider trading allegations.
Coinbase declined to comment.
There is an ongoing discussion about which cryptocurrencies should be treated as securities. The SEC made a bold move by designating nine cryptocurrencies—seven of which are now listed by Coinbase—as securities as part of the insider trading investigation that was made public last week.
Just a week ago, Coinbase stated:
“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. But instead of having a dialogue with us about the seven assets on our platform, the SEC jumped directly to litigation.”