Coinbase Chief Legal Officer Paul Grewal rejected the dispersal of unlisted securities charges by the SEC in a blog post.
Coinbase Denied SEC Assertions
Following allegations of fraud against a former employee, Coinbase denied assertions made by the Securities and Exchange Commission that it distributes unregistered securities.
A former Coinbase product manager and two other people were charged on Thursday (July 21) with wire fraud in connection with a cryptocurrency insider trading conspiracy. This is the first instance of its sort.
US authorities charged the defendants with coordinating a scheme to benefit from the Coinbase platform's listing of new coins before their official announcement.
Nine of the 25 tokens allegedly exchanged in the scam, according to a second lawsuit the SEC filed were securities.
In a blog post titled "Coinbase Does Not List Securities," published on July 21, Coinbase Chief Legal Officer Paul Grewal refuted the accusations.
It is a problematic issue that has confused authorities and cryptocurrency companies about whether particular cryptocurrencies could be regarded as securities.
The SEC has also filed a lawsuit against Ripple, a blockchain company in San Francisco, alleging that the cryptocurrency XRP, which has a strong relationship, should be regarded as a security.
Stringent disclosure and registration requirements are involved in listing securities, such as stock in a firm. In contrast, since cryptocurrencies are unregulated, they are not subject to the same amount of scrutiny.
When it comes to its structure for listing tokens, Coinbase is acknowledged to be more cautious than some other exchanges. For instance, according to CoinGecko statistics, whereas Coinbase provides just over 200 currencies, both Binance and FTX offer more than 300 coins.
However, Coinbase disputes the SEC's accusation of hosting unregulated securities on its platform.
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Ex-Coinbase Manager Ishan Wahi was Detained in US Insider Trading Case for Crypto
Federal prosecutors in Manhattan filed the first prosecution for insider trading in virtual currency, accusing a former product manager of Coinbase Global Inc. of disclosing information to enable his brother and a friend to purchase tokens moments before they were posted on the exchange.
Ishan Wahi was detained on Thursday (July 21) as a result of a thorough investigation conducted by the Southern District of New York and the Securities and Exchange Commission. Ishan Wahi assisted in managing listings for a Coinbase business specializing in financial products.
Additionally, Wahi was accused of breaking the SEC's anti-fraud regulations.
Manhattan prosecutors began investigating exact Coinbase token investments in April. The investigation accelerated in mid-May when Wahi was banned from leaving the country.
In accordance with the prosecution, Coinbase scheduled an interview with Wahi for May 16 in Seattle as part of its internal investigation into the suspicious trading activity. Wahi purchased a one-way ticket for an 11-hour journey to New Delhi the previous evening.
The next day, 35 minutes before the interview, Wahi said he "had to leave home" Wahi sent his brother and Sameer Ramani images of Coinbase's security director's emails.
Wahi was unable to board his aircraft because of the arrival of law enforcement officers at the airport.
The government agreed to remote surveillance as part of Ishan Wahi's $1 million bail package guaranteed by his Robinhood account, prosecutors said in Seattle.
