Coinbase, the largest US cryptocurrency trading platform, has been sued by the US Securities and Exchange Commission (SEC) for operating as an unregistered broker. The SEC accuses Coinbase of evading disclosure requirements and failing to provide necessary investor protections. Following the lawsuit, Coinbase’s shares dropped by 15.9%.
This action comes a day after the SEC filed a lawsuit against Binance, the world’s largest cryptocurrency exchange. Binance and its founder Changpeng Zhao are facing allegations of deceptive practices to evade US laws. In response to the lawsuit, investors have withdrawn approximately $790 million from Binance and its US affiliate. The SEC’s legal action against Binance marks a significant step in its crackdown on the cryptocurrency industry.
Bitcoin also experienced a decline, while Binance’s BNB cryptocurrency fell to a three-month low. Binance has stated its cooperation with the SEC and its intention to vigorously defend its platform. This lawsuit adds to the legal challenges faced by Binance, including a previous lawsuit by the US Commodity Futures Trading Commission (CFTC).
