Coinbase Global Inc., a publicly traded crypto company and one of the largest cryptocurrency exchanges in the crypto industry, is reportedly facing renewed scrutiny from the U.S. Securities and Exchange Commission (SEC) over allegations it listed crypto tokens.
A Bloomberg report on Tuesday, citing sources with knowledge of the development, said the investigation predates the recent allegations of insider trading against a former Coinbase employee.
However, while the agency has been monitoring token listings on leading cryptocurrency exchanges, scrutiny has increased since the US-based company started adding more tokens to its trading platform.
Coinbase insists it doesn’t list securities
In its insider trading charges against the former Coinbase manager and two others last week, the SEC noted that nine of the tokens involved were securities.
Coinbase, which offers access to more than 150 tokens on its trading platform, responded to the securities regulator’s allegations that while the seven tokens highlighted in the insider trading case were listed on the platform, none were securities.
Paul Grewal, the company’s chief legal officer, reiterated this in a statement shared in a July 22 blog post, saying the exchange 100% disagrees with the SEC’s views and allegations. He also reiterated that stance on Tuesday as the investigative report surfaced.
Grewal said Coinbase is ready to engage with regulators.
I’m happy to reiterate: We believe that our rigorous due diligence process (one that the SEC has reviewed) excludes securities from our platform, and we look forward to engaging with the SEC on this matter. Review: https://t.co/SaacvrZEiU
— paulgrewal.eth (@iampaulgrewal) July 26, 2022
Coinbase (COIN) shares fell sharply in premarket Tuesday, down more than 5% amid a similar decline in Bitcoin.