A day after the lawsuit filed against Binance, the Securities and Exchange Commission (SEC) also filed a lawsuit against America’s largest crypto company, Coinbase. With these moves, the North American regulator has already formally accused two major exchanges of breaking the law. However, there are important differences between the claims of the two companies.
Illegal work controversy. The SEC accuses Coinbase of operating illegally without registering with the regulator in a 101-page document. In this respect, Binance’s fault was also requested.
Coinbase has tried countless times to reach a settlement with the SEC by going to court as long as it clarifies how the law should apply to these crypto companies.
According to the SEC, tokens such as Solana, Polygon or Cardano must be registered as financial assets. Something that neither Coinbase nor Binance has done.
Leaving customers unprotected. According to SEC chairman Gary Gensler, Coinbase illegally sells financial products. Something that leaves customers with less protection: “Coinbase’s mistakes have deprived its investors of critical protections, including regulatory registration that prevents fraud and manipulation, protections against conflicts of interest, and routine auditing by the SEC”.
Brian Armstrong was not personally charged. Unlike the case of Binance, where its CEO and 13 different charges had a specific charge, in the Coinbase case, the company was sued whole-body without specifically mentioning anyone.
No signs of fraud. Basically, the message sent is very different. At Binance the focus is on executives, while at Coinbase the focus is on the way it works but does not point to any specific operations that might support a particular interest.
Multiple states have decided to block Coinbase. Following the SEC’s lawsuit, several states have decided to block Coinbase. A total of 10 states: Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington and Wisconsin.
Coinbase is waiting to see the next step. As of now, Coinbase has not made an official statement. While this new lawsuit has caused a significant drop in stock value, its battle against the SEC isn’t coming from now on.
Image | AlphaPhoto (CC 2.0 BY NC)
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Jason Root is a blockchain enthusiast and author at Div Bracket. He provides comprehensive coverage of the latest developments in the world of blockchain, offering readers a unique perspective on the industry and its potential for revolutionizing various industries.