Coinbase (COIN) stock is falling after a judge ruled that the Securities and Exchange Commission (SEC) can proceed with its lawsuit against the cryptocurrency exchange. The SEC alleges that Coinbase violates federal securities laws, alleging that Coinbase wallets operate as unregistered intermediaries.
Yahoo Finance's Jennifer Schonberger explains the details.
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Editor's note: This article was written by angel smith
video transcript
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Sheena Smith: We're watching Coinbase's stock price drop by just about 1.5% after a judge rules allowing the SEC's lawsuit against the crypto exchange to proceed. The judge said Coinbase was engaged in the quotation, unregistered sale, and offer of securities under U.S. law. Now our very own Jennifer Schoenberger joins us for this update. Jennifer.
Jennifer Schoenberger: Hello, Sheena. That is correct. A judge in the Southern District of New York ruled this morning that Coinbase engaged in unregistered sales of securities, allowing the SEC's lawsuit to proceed. The judge ruled that Coinbase operates as an exchange, broker, and clearinghouse for purposes of federal securities laws. please remember. The SEC sued Coinbase last year, alleging that it violated federal securities laws based on the fact that Coinbase trades in securities. It also claimed that the Coinbase wallet acted as an unregistered intermediary.
Paul Grewal, Coinbase's chief legal officer, is currently tweeting, “Today the court decided to move forward on most claims in our SEC lawsuit, but the claims against the Coinbase wallet were dismissed. “We are preparing for this and look forward to revealing more about the SEC's internal views and discussions regarding virtual currency regulation. Looking ahead, We remain confident in our legal arguments.”
Of course, Coinbase's stock price has fallen on the news. We will continue to investigate this and how it affects the largest U.S. crypto exchange going forward.
