The well-known crypto exchange Coinbase is going through a difficult situation due to the latest lawsuit filed against it. The United States Securities and Exchange Commission (SEC) has recently submitted a lawsuit against it. This occurs just a day after the securities regulatory agency’s submission of a lawsuit against another top crypto exchange named Binance.

SEC Files a Lawsuit against Coinbase for Allegedly Offering Unregistered Securities

In its lawsuit filing, the regulator has raised several against the platform. As per the SEC, the crypto exchange has supposedly infringed the federal securities laws. The filing of a similar lawsuit against the prominent crypto exchanges consecutively raises several concerns. As per the regulatory organization, the platform has operated as a broker, a clearing agency, and an exchange without any registration.

In addition to this, the securities regulator has argued that solicited clients permitted bids, and handled orders. Moreover, it also played the role of a mediator simultaneously. Particularly, the lawsuit against Coinbase mentions the name of Coinbase Global, Inc. and Coinbase, Inc. Nonetheless, there is no mention of any executive of the platform including Brian Armstrong (Coinbase’s CEO and founder).

As noted in the lawsuit filing, Coinbase has been performing 3 functions at the same time. Conversely, they are normally distinctive in conventional securities markets. Moreover, the SEC asserted that no registration was ever secured from the regulator for the respective purposes. In this way, the crypto exchange infringed the disclosure regime established by Congress for the securities markets.

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The premarket stock value of Coinbase slumped to a great extent because of the respective lawsuit. The SEC claimed Coinbase knew that the crypto assets it offered to the US clients may have the qualities of securities. The regulatory organization noted this while referring to Coinbase’s Crypto Ratings Council effort spearheaded by it in 2019. As per the SEC, that was the time when the crypto exchange offered some high-risk assets.

The Regulator Mentions the Crypto Securities in Its Lawsuit Filing

In its words, the crypto exchange provided the respective assets under the CRC agenda adopted by it. The SEC is of the view that the platform made the systematic business decision for the inclusion of crypto assets. The purpose of doing this was to acknowledge its growth as well as to enhance its trading profits on it. The regulator categorized filecoin (FIL), sandbox (SAND), polygon (MATIC), cardano (ADA), Solana (SOL), and some other assets as securities.