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The Securities and Exchange Commission is charging Coinbase with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency.
Coinbase was also charged for failing to register the offer and sale of its crypto asset staking-as-a-service program.
Users of trading platforms can stake their cryptocurrency, essentially locking up some of their assets, in exchange for payment later, much like earning interest rates in a savings account. Those assets are used by platforms like Coinbase Global to guarantee other transactions taking place on the blockchain. Coinbase has been critical of regulations related to staking, calling them vague.
The SEC complaint also alleges that Coinbase’s holding company, Coinbase Global Inc., is a control person of Coinbase and therefore is also liable for some of Coinbase’s violations.
Shares of Coinbase Global tumbled nearly 17% before the market open on Tuesday.
