The US Securities and Exchange Commission (SEC) has launched an investigation into Coinbase Global for possible access to trading digital assets that could be considered securities for residents of the United States. Bloomberg writes about it, citing sources familiar with the situation.

According to them, the SEC began to watch Coinbase more closely as the exchange increased the number of tokens for trading.

Also on July 21, the US Department of Justice announced the arrest of former Coinbase product manager Ishan Wahi. He was accused of committing fraud using insider trading. The defendants in the case are Vahi’s brother and Samir Ramani.

According to investigators, they used confidential information about upcoming listings of digital assets on the exchange to make profitable trades.

The SEC emphasized that we are talking about securities fraud by filing lawsuits against suspects with similar arguments. As such, the agency has classified 9 out of 25 cryptocurrencies that the defendants allegedly used in their operations.

Coinbase stressed that securities are not traded on its platform.

US Commodity Futures Trading Commissioner Caroline Pham believes that the SEC’s designation of several tokens as securities in the Wahi investigation could have serious implications for the entire industry.

In June, Ripple CEO Brad Garlinghouse accused the SEC of using a coercive approach rather than working on clear regulation for the industry.

Member of the House of Representatives Tom Emmer said that the agency interfered with the regulation of the cryptocurrency space and engaged in unethical behavior towards its participants.

Bloomberg previously reported that the SEC was investigating whether Binance’s BNB token was a security during its sale in 2017. However, the Commission later denied this information.

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