Cryptocurrency Exchange Coinbase Faces SEC Securities Investigation

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The US Securities and Exchange Commission (SEC) is investigating whether Coinbase Global Inc improperly allowed Americans to trade digital assets that should have been registered as securities, Bloomberg News reported Monday.

In an emailed response, a Coinbase spokesperson told Reuters the company does not trade securities on its platform, while its chief legal officer Paul Grewal said they expected to engage with the SEC on the matter.

“We are confident that our rigorous due diligence process, a process that has already been reviewed by the SEC, keeps securities off our platform,” Grewal added.

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SEC scrutiny has increased since the crypto trading platform expanded the number of tokens it offers trading in, the Bloomberg report added, citing two sources. (

The US securities regulator did not respond to Reuters’ request for comment on the report.

The investigation by the SEC’s enforcement unit predates its investigation into an alleged insider trading scheme that was disclosed last week.

In the first insider trading case involving cryptocurrency, US prosecutors had charged Ishan Wahi, a former Coinbase product manager, with sharing confidential information about upcoming announcements of new cryptocurrency assets that Coinbase would allow users to trade on through their exchange.

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In related civil charges, the SEC alleged that Wahi’s brother Nikhil Wahi and his friend Sameer Ramani bought and sold at least 25 crypto assets for profit, nine of which the agency identified as securities .

At the time, the SEC declined to confirm whether it would take action against Coinbase for including the tokens considered securities in the complaint.

The cryptocurrency platform has previously asked the SEC to develop rules that work for digital asset securities.

(Reporting by Jaiveer Shekhawat, Jahnavi Nidumolu and Nivedita Hazra in Bangalore; Editing by Uttaresh.V and Sherry Jacob-Phillips)

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