The SEC has filed a lawsuit against Coinbase and problems rise for Cardano
The Cardano token is under double attack as a significant US cryptocurrency exchange is being sued by a banking regulator.
Coinbase, a prominent U.S. cryptocurrency exchange, has been sued by the Securities and Exchange Commission (SEC) less than 24 hours after Binance was sued by the SEC. SEC claims that Coinbase has operated as an unregistered broker since at least 2019. This is a breach of a disclosure system for securities markets.
Cardano’s ADA token, also at issue in the latest complaint against Binance, is only one example of the unregistered securities the regulator alleges Coinbase marketed.
Information released by Cardano, IOHK, and Emurgo, especially after the first sale of ADA, led the SEC to classify ADA as a security, according to the petition. The complaint claims that anybody who purchased an ADA token after March 20, 2021, was misled into thinking they were investing in the Cardano Foundation, IOHK, or Emurgo. These investors hoped to benefit from the platform’s growth since they anticipated a subsequent increase in demand and price.
The Cardano token’s value had dropped significantly within minutes of the news breaking. The effects were felt far beyond Cardano. The stock price of Coinbase, a publicly listed business, declined as the news spread. In premarket trading on the New York Stock Exchange, its shares fell by more than 15%.