Bitcoin exchange The U.S. Securities and Exchange Commission (SEC) asserts that nine digital assets offered on Coinbase’s platform are securities.
Paul Grewal, the chief legal officer of Coinbase, says the exchange denies the SEC’s contention that nine of its listed digital assets are securities in its lawsuit against a former employee and two others suspected of insider trading.
According to Grewal, Coinbase undergoes a thorough vetting procedure before launching digital assets to guarantee that securities are excluded from the site.
Before making a digital asset accessible on our exchange, Coinbase applies a thorough analysis and assessment process evaluated by the SEC.
Even though the U.S. Department of Justice (DOJ) and the SEC are reviewing the same evidence, only the SEC considers the crypto assets involved in the insider trading case to be securities, according to the senior attorney for Coinbase.
In its lawsuit about insider trading, the SEC asserts that nine Ethereum-based tokens available on the exchange constitute securities. Amp (AMP), Rally (RLY), PowerLedger (POWR), XYO Network (XYO), Rari Governance Token (RGT), LCX (LCX), DerivaDAO (DDX), DFX Finance (DFX), and Kromatika are highlighted by the agency (KROM).
They also highlighted, among other things, their attempts to have their cryptocurrency-backed securities listed on secondary trading platforms and the vital role that executives and other firm employees had in turning the company into a success, hence enhancing crypto-backed securities’ value….”
In other words, each of the nine firms solicited investment with the assurance that it would devote future efforts to increase the investment’s worth.
These characteristics of the definition of security continue to apply to the nine crypto asset securities at issue in this complaint, including continued claims by issuers and their management teams about the investment worth of the tokens, the managerial activities that contribute to the tokens’ value, and the existence of secondary markets for trading the tokens.”
