American cryptocurrency exchange Coinbase is about to face an enforcement action as the US Securities and Exchange Commission (SEC) has noted the exchange that its products violate securities laws.
Subscribe to our Telegram channel to get daily short digests about events that shape the crypto world
The San Francisco-headquartered crypto exchange wrote in a Thursday blog post it had received a "Wells notice" from the SEC, a declaration that the financial regulator plans to bring the exchange to court. Coinbase says the SEC's lawsuit might be tied to staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet.
Coinbase noted it had spent "millions of dollars on legal support" and repeatedly asked for the SEC's feedback. However, the watchdog never replied. The exchange added:
"We also reiterated that we stand by our listings process – we don't list securities today – and repeatedly invited the SEC to raise any questions about any asset at all on our platform. They raised none."
Shortly after Coinbase reported about the SEC's notice, it suspended staking services for algorand (ALGO). Algorand Foundation CEO, Staci Warden, said in a tweet the exchange started evaluating its services "in light of recent regulatory scrutiny." Despite the removal from staking, ALGO remains in Coinbase's listing for spot trading, Warden noted.
Amid the news, Coinbase's shares (COIN) plunged 13.7% on Nasdaq to $66.5, according to data from Yahoo.
Access more than 50 of the world's financial markets directly from your EXANTE account – including NASDAQ, London Stock Exchange and Tokyo Stock Exchange