After being accused of fraud by a former employee, Coinbase disputed assertions made by the Securities and Exchange Commission that it provides unregistered securities. A former product manager and two other people were charged on Thursday with wire fraud in connection with a purported cryptocurrency insider trading conspiracy. This is the first instance of its sort.
U.S. authorities charged the defendants with conspiring to make money by preemptively launching new currencies on the Coinbase platform. Nine of the reportedly 25 tokens sold in the scam, according to a second lawsuit the SEC filed on Thursday, were securities. Paul Grewal, the chief legal officer of, refuted the allegations in a blog post titled “Coinbase does not list securities” on Thursday. Grewal said in the blog post, “seven of the nine assets referenced in the SEC’s accusations are listed on platform.” There are no securities among these assets.
The SEC defines security as “an investment of money in a joint venture, with a reasonable expectation of benefit derived from others’ labour. “The SEC’s stance is important because it may require Coinbase to categorise some of the cryptocurrencies it provides as regulated financial instruments. There are stringent disclosure and registration requirements involved in the process of listing securities, such as stock in a firm. In contrast, because cryptocurrencies are unregulated, they are not subject to the same scrutiny.
When it comes to its structure for listing tokens, is acknowledged to be more cautious than some other exchanges. For instance, according to CoinGecko statistics, whereas provides just over 200 currencies, both Binance and FTX offer more than 300 coins. However, disputes the SEC’s accusation that it is hosting unregulated securities on its platform.