SEC Is Probing Coinbase For Reportedly Listing Securities: Report

SEC is probing Coinbase for reportedly listing securities and the investigation predates last week’s insider trading lawsuit as we reported in our previous Coinbase news.

The US SEC is probing Coinbase as a publicly-traded company it oversees on suspicious it allowed US customers to trade unregistered securities. Bloomberg noted that the regulator was investigating some of the tokens listed on the exchange but the SEC alleged a week ago that seven cryptocurrencies listed on the platform were securities in the unrelated insider trading case brought against the former product manager of the exchange.

1/ Reminder about how Coinbase lists assets: our goal is to list *every* asset where it is legal to do so.

— Brian Armstrong – barmstrong.eth (@brian_armstrong) June 28, 2021

The SEC chair Gary Gensler also said that he thinks that Coinbase should register as a national security exchange and gave some of the cryptocurrencies that it has listed. Coinbase criticized the SEC for providing clear rules for defining how cryptos might be deemed securities and the exchange’s Chief Policy Officer Faryar Shirzad said that the existing securities laws might not fit crypto. The CEO Brian Armstrong’s goal of listing each token for the exchange can legally appear to have its drawbacks and according to two people, the SEC gave the exchange’s practices a look amid the increase in the token listings.

Coinbase chief LEgal Officer Paul Grewal said:

 “We are confident that our rigorous diligence process—a process the SEC has already reviewed—keeps securities off our platform, and we look forward to engaging with the SEC on the matter.”

As earlier reported, Coinbase Ventures reports show that the overall deal activity dropped along with the pessimistic sentiment that is taking reign on the broader market. The bearish market conditions did nto change the company’s investment thesis on the infrastructure projects which demonstrate real utility as well in the Web3 gaming sector. Coinbase Ventures will focus on DeFi as the deal activity was down 34% from 71 to 47 but it remained up by 68% year over year according to the Q2 investment memos. The investment giant noted that the slowdown in the broader market venture kicked in in Q1 and witnessed the first drop in funding since 2019.

Coinbase’s investing branch attributed a decline to high volatility which caused investors to rethink or put their rounds on pause and bet on companies that can show the growth needed to justify a new round. Despite the macro environment, Coinbase Ventures continue to invest in projects with utilities as it can be shown in the Web3 protocols like Platform and Developer Tool which account for 38% of the total investments. In addition to Web3 infrastrcuture, the gain invested in the blockchain gaming sectors as Web3 game developers that started embracing the new category.