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A day after cracking down on, the SEC is now taking aim at .
The Commission alleges in a new lawsuit that the crypto exchange failed to register as an exchange, clearing house, and broker despite providing investors these services. The SEC also alleges that Coinbase offered and sold unregistered securities via its staking service.
The agency also claims that Coinbase "made available for trading crypto assets that are being offered and sold as investment contracts, and thus as securities."
Tokens powering Solana, Cardano, Polygon, Filecoin, The Sandbox, Axie Infinity, Chiliz, Flow, Internet Computer, Near Protocol, Voyager, Dash, and Nexo have all been deemed securities by the SEC.
"Coinbase has elevated its interest in increasing its profits over investors’ interests, and over compliance with the law and the regulatory framework that governs the securities markets and was created to protect investors and the U.S. capital markets," today's filing reads.
The SEC also said that the defendants—Coinbase, Inc. and Coinbase Global, Inc.—should be "permanently restrained and enjoined" and no longer able to do business in the United States.
“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," Coinbase Chief Legal Officer Paul Grewal shared with Decrypt. "The solution is legislation that allows fair rules for the road to be developed transparently and applied equally, not litigation. In the meantime, we’ll continue to operate our business as usual.”
In March, the American regulator issued Coinbase with a Wells Notice to indicate that it would soon bring an enforcement action against Coinbase.
A person familiar with the matter told Decrypt at that time that Coinbase leadership is frustrated that the SEC has allowed American investors to participate in crypto for years before "suddenly deciding to pull the rug out."
The SEC sued Binance yesterday for offering unregistered securities and allowing U.S. investors to access Binance.com. It also alleged that Changpeng Zhao, the exchange's CEO, and the exchange misused and commingled customers' funds.
The SEC vs. Coinbase
Today's action comes after a long battle between the crypto exchange and the financial regulator.
In April, Coinbase also took the SEC to court, demanding a judge to compel the agency to provide regulatory clarity around cryptocurrencies. This was after sending the agency a questionnaire that would provide "clarity and certainty regarding the regulatory treatment of digital asset securities" in July 2022.
The SEC has not yet responded to those questions.
The crypto exchange has since opened an international branch following regulatory approval from the Bermuda Monetary Authority (BMA), initially offering Bitcoin and Ethereum perpetual futures. Coinbase said at that time it was still committed to its U.S. market.
"We would like to see the U.S. take a similar approach instead of regulation by enforcement, which has led to a disappointing trend for crypto development in the U.S.,” it said.