On Monday, the United States Securities and Exchange Commission (SEC) initiated an investigation into the major crypto exchange Coinbase. The SEC investigates Coinbase to check whether it was illegally allowing Americans to transact in digital assets that should have been listed as securities. The aforementioned news was reported by Bloomberg.
Though the crypto exchange firm suspended trading XRP from January 21, 2021, there was still room for the SEC to know the amount of these tokens transacted through Coinbase prior to that. This move by the U.S. regulatory body is also in line with what U.S. Congressman Brad Sherman earlier urged them to do. Sherman had earlier highlighted SEC’s futile efforts saying:
“You’ve gone after XRP because XRP is a security. But you haven’t gone after all the major crypto exchanges that processed tens of thousands, if not, far more transactions. If XRP is a security, and you think it is, and I think it is, why are these crypto exchanges not in violation of the law?”
Coinbase currently doesn’t list XRP, which the SEC considers a security, however, Coinbase Pro does. Both these cryptocurrency exchange platforms are owned by Coinbase Global Inc. (NYSE: COIN). This might be one of the reasons for such a move by the SEC.
As SEC Investigates Coinbase, a representative of the company sent an emailed response to Reuters saying that they have not listed any securities on their platform. It also mentioned that Paul Grewal, the company’s legal head, is looking forth to engaging with the SEC on this particular concern. He added:
“We are confident that our rigorous diligence process — a process the SEC has already reviewed — keeps securities off our platform.”
The company has been on the radar of the SEC after the inclusion of several other crypto tokens available to be traded. The more the number of listings, the more the chances of discrepancies. Moreover, after Brad’s comments on the matter, the regulatory body might have sought speedy actions.
However, the regulatory body has yet not revealed whether it would take any action against the crypto firm for listing cryptos that are deemed securities. Therefore, it would be interesting to keep an eye on the matter as the SEC investigates Coinbase.