Coinbase Vs. SEC Calls Into Question The Future Of U.S. Crypto Exchanges

Coinbase Vs. SEC Calls Into Question The Future Of U.S. Crypto Exchanges

Share to Linkedin Larry Gensler, head of the Securities and Exchange Commission, does not like the idea of ... [+] cryptocurrency exchanges also operating as trading platforms for retail investors. Now what? (Photo by Brendan Smialowski/Getty Images) What is a cryptocurrency exchange and what can it offer retail investors? That is the question. The Securities and Exchange Commission says they are clear on that. Coinbase COIN begs to differ. Now the SEC is suing them in another stress test for the American crypto market. The SEC sued Coinbase on June 6, alleging that the company was operating as an unregistered broker. Think of it as the NYSE and E*Trade acting as one. That is Coinbase. No retail investor buys stocks directly from the NYSE. The SEC said that Coinbase's brokerage operation and its staking programs all violate securities laws in its complaint. The company "has for years defied the regulatory structures and evaded the disclosure requirements" of U. S. securities law. "We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions," Gensler said in a statement. Coinbase instantly battled back. "The SEC's reliance on an enforcement-only approach in the absence