Legal
The Securities and Exchange Commission (SEC) has recently taken a hardline approach against the cryptocurrency industry. In the latest lawsuits against Coinbase and Binance, the regulator alleges that Coinbase was operating as a broker, national securities exchange, and clearing agency without registering with the agency. Coinbase is now facing scrutiny from a task force of ten U.S. state securities regulators. Regulators said Tuesday that Coinbase has 28 days to explain how its staking service did not violate state securities laws.
The SEC’s reliance on an enforcement-only approach in the absence of clear rules for the digital asset industry is hurting America’s economic competitiveness and companies like Coinbase that have a demonstrated commitment to compliance.
Paul Grewal, Coinbase’s chief legal officer said.
According to Gurbir S. Grewal, director of the SEC’s Division of Enforcement, the consequences for the investing public are far too significant.
The lawsuit against Coinbase is quite detailed, outlining “a non-exhaustive list” of 13 cryptocurrencies that it argues are securities, including Solana (SOL), Cardano (ADA), and Polygon (MATIC). After the lawsuit became public, SOL was down approximately 4.2%, ADA 4%, and MATIC 3%. The total market capitalization of all cryptocurrencies sagged by about 3%, as CoinMarketCap shows.
The depression in the market mirrors the price action seen on Monday when the SEC sued Binance. Both cryptocurrencies and the share prices of publicly traded crypto companies, including Coinbase, took a hit.
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