Crypto firm Coinbase charged with exchange, staking violations in US

ISTANBUL

Coinbase was charged with violating exchange and securities laws in the US, the Securities and Exchange Commission (SEC) announced Tuesday.

The SEC said in a statement that Coinbase was charged with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency.

Coinbase was also charged with failing to register the offer and sale of its crypto asset staking-as-a-service program.

"We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions," SEC Chair Gary Gensler said in a statement. "In other parts of our securities markets, these functions are separate."

"Coinbase never registered its staking-as-a-service program as required by the securities laws, again depriving investors of critical disclosure and other protections," he added.

The SEC's complaint was filed in the US District Court for the Southern District of New York.

Staking in the cryptocurrency market is a mechanism when users, or investors, lock a certain amount of crypto assets for a period of time to help support the operation of a blockchain and earn more crypto in return. Many cryptocurrency blockchains use this mechanism known as proof of stake.

The announcement comes one day after the SEC sued the world's biggest crypto trading platform, Binance, and founder and CEO Changpeng Zhao, for violating several US securities laws.

The market watchdog filed 13 charges against Binance entities and Zhao, some of which included operating unregistered exchanges, broker-dealers, and clearing agencies, misrepresenting trading controls and oversight on the Binance.US platform, and the unregistered offer and sale of securities.