The Securities and Exchange Commission is reportedly investigating Coinbase Global Inc. over whether it has allowed the trading of unregistered securities.
Bloomberg News reported late Monday that regulatory scrutiny has increased since Coinbase expanded the number of digital tokens it offers for trading. The report said the investigation predates a separate probe into alleged insider trading, in which a former Coinbase manager was charged last week.
The same basic issue appears to be at the root of both cases: The SEC claims some cryptocurrencies offered by Coinbase are securities, while the company says they are not. Last week, the SEC claimed nine digital assets traded by by Coinbase are actually securities.
“Coinbase does not list securities. End of story,” Coinbase Chief Legal Officer Paul Grewal said in a statement last week.
Grewal reiterated that Monday night. “We are confident that our rigorous diligence process — a process the SEC has already reviewed — keeps securities off our platform, and we look forward to engaging with the SEC on the matter,” he said in a statement.
Coinbase allows trading for more than 150 digital tokens, many far less well known than the likes of bitcoin
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