The SEC claims Coinbase knew it may have broken securities laws but did nothing about it
The U.S. Securities and Exchange Commission (SEC) claims in newly released court papers that Coinbase knew it may have been in violation of securities laws before the SEC filed an action against the cryptocurrency exchange.
According to the SEC’s latest court filing, the cryptocurrency company knowingly engaged in illegal activities but chose to go on anyhow in order to expand.
Coinbase has warned crypto asset issuers against making claims in their marketing materials that are “problematic statements” and “traditionally associated with securities.”
These activities demonstrate that Coinbase was aware of the possibility that the securities laws might apply to its behaviour and that it was also aware of the relevant rules to consider when determining whether or not its conduct was lawful but yet decided to accept the risk in order to expand its company.
After Coinbase identified many cryptocurrencies as securities last month, including Cardano (ADA), Solana (SOL), and Polygon (MATIC), the SEC filed a lawsuit against the exchange last month, saying that it was trading unregistered securities.
Coinbase claimed that the SEC lacked authority over the lawsuit and filed a motion to dismiss it at the end of June.