Coinbase Says SEC Has No Authority to Sue Crypto Companies

Previously, the US Securities and Exchange Commission (SEC) expanded its crackdown on the crypto industry by accusing Coinbase Global Inc of running an illegal exchange.

Reporting from Yahoo Finance, Wednesday (7/6/2023), in a 101-page lawsuit filed Tuesday, June 6, 2023 in federal court in New York, the SEC accused Coinbase for years circumventing its rules by allowing users to trade many different crypto tokens. are actually unregistered securities.

The day before, regulators sued crypto exchange Binance, alleging multiple violations of US securities regulations.

The SEC is moving against Coinbase, the largest US crypto exchange, after SEC Chairman Gary Gensler repeatedly argued most crypto tokens should be subject to his agency’s scrutiny and large parts of the industry had broken the law.

At the same time, US regulators are warning banks to stay away from cryptocurrencies due to potential risks to the financial system, making it difficult for US citizens to invest.

The SEC civil lawsuit stands out because of Coinbase’s high profile in the US, and its status as a publicly traded company. Coinbase shares were down 12 percent in New York trading. At one point on Tuesday, the decline cut around USD 1.5 billion or the equivalent of IDR 223.1 trillion (assuming an exchange rate of IDR 14,879 per US dollar) from the company’s market capitalization.

A Blow To The Crypto Industry

The case against Coinbase, coupled with Binance forms a blow to the industry. The SEC accused Binance, the world’s largest crypto platform, and its chief executive, Changpeng Zhao, of mishandling customer funds, misleading investors and regulators, and violating securities rules.

The SEC requested a temporary restraining order on Tuesday to freeze some assets as part of the case.