Washington, D.C.: The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase, the largest cryptocurrency exchange in the United States, accusing the company of operating unlawfully by failing to register with the regulatory agency.

This legal action marks the SEC’s second lawsuit in as many days targeting a major cryptocurrency exchange, following its case against Binance, the world’s largest cryptocurrency exchange, and its founder, Changpeng Zhao.

The SEC’s decision to pursue legal action against Coinbase is part of Chairman Gary Gensler’s ongoing efforts to establish regulatory oversight over the rapidly evolving cryptocurrency markets. Gensler has repeatedly referred to the crypto industry as a “Wild West” of investing, emphasizing the need to protect investors and enhance trust in the capital markets.

The Securities and Exchange Commission (SEC) has sued a number of cryptocurrency platforms, alleging that they have violated securities laws.

Some of the most notable cases include:

• Ripple Labs: The SEC sued Ripple Labs in December 2020, alleging that the company had raised $1.3 billion through an unregistered securities offering. Ripple Labs has denied the allegations and is fighting the case in court.
• BlockFi: The SEC sued BlockFi in July 2021, alleging that the company was offering interest-bearing accounts that were unregistered securities. BlockFi has agreed to pay a $100 million fine and has agreed to register its interest-bearing accounts as securities.
• Kraken: The SEC has reportedly started an investigation into Kraken, alleging that the exchange may have allowed US investors to trade unregistered securities. Kraken has denied the allegations.

The SEC is taking a tough stance on cryptocurrency platforms, and it is likely that we will see more lawsuits in the future. The SEC is concerned that cryptocurrency platforms are not following the same rules as traditional financial institutions, and it is trying to protect investors from fraud.

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Here are some of the reasons why the SEC has sued cryptocurrency platforms:

• Failure to register securities: The SEC requires that most securities be registered with the agency before they can be offered or sold to the public. Cryptocurrency platforms have often failed to register their tokens or coins as securities, which is a violation of the law.
• Fraudulent activity: The SEC has also sued cryptocurrency platforms for engaging in fraudulent activity, such as misleading investors about the risks of investing in cryptocurrency or making false promises about the returns that investors could expect.
• Market manipulation: The SEC has also sued cryptocurrency platforms for engaging in market manipulation, such as artificially inflating the price of a cryptocurrency or suppressing the price of a cryptocurrency.

The SEC’s actions against cryptocurrency platforms are a sign that the agency is taking a serious look at the cryptocurrency industry. It is important for cryptocurrency platforms to comply with all applicable securities laws to avoid being sued by the SEC.

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