Coinbase faces SEC lawsuit

The Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase, alleging that the company violated securities laws and exposed customers to significant risk.

The lawsuit comes just one day after the SEC sued Coinbase's biggest competitor, Binance, for operating an unregistered exchange.

According to the SEC, Coinbase operated as a broker, exchange, and clearing agency without registering with any of these entities. This allowed Coinbase to avoid complying with securities disclosure requirements, potentially endangering its customers while earning billions in trading fees.

The SEC's lawsuit seeks to permanently restrict and prohibit Coinbase from continuing its illegal activities.

Coinbase, known for its listings of popular cryptocurrencies, has faced increasing attention for its listing process. The SEC alleges that for Coinbase, its own profits were prioritized over investor interests and compliance with securities laws.

In response to the lawsuit, Coinbase said it will continue to operate as usual and criticized the SEC's enforcement-only approach. The company called for clear rules and legislation for the digital asset industry that are transparent and applied equally.

Coinbase believes that the current regulatory environment prevents America's economic competitiveness and the growth of compliant companies.