Before the heat between Coinbase and the SEC started, the crypto exchange was always conservative in its token listing.
FTX CEO Sam Bankman-Fried (SBF) has said his piece about the current matter between the US Securities Exchange Commission (SEC) and Coinbase. In his opinion, SBF said the Commission would be in charge of regulating tokens that are considered securities. SBF added that tokens that share similar features with commodities would be under the Commodity Futures Trading Commission (CFTC) regulation.
Coinbase vs SEC
The FTX founder and CEO stated his opinion after the SEC went after Coinbase for insider trading. A former employee of Coinbase has been charged in connection with a crypto insider trading scheme. In its first-of-its-kind case for Coinbase, the Commission also made mention of the former employee, Ishan Wahi, working with his brother Nikhil Wahi and friend Sameer Ramani. The SEC accused them of plotting to gain from listing new tokens on the Coinbase platform before going live. In another complaint, the regulator declared that nine of the 25 tokens that were allegedly traded in the crypto insider trading were securities.
However, Coinbase Chief Legal Officer Paul Grewal denied the claims in a blog post on the 21st of July. Grewal said that “Coinbase does not list securities. End of story.” He added that none of the assets listed by the SEC are securities.
“Coinbase has a rigorous process to analyze and review each digital asset before making it available on our exchange – a process that the SEC itself has reviewed. This process includes an analysis of whether the asset could be considered a security, and also considered regulatory compliance and information security aspects of the asset.”
Cryptos that Qualify as Securities Remains an Issue in the Industry
The issue of some crypto being securities has been a contentious matter in the industry. Ripple is still fighting its case with the SEC, which claims the protocol’s native token XRP is a security.
Before the heat between Coinbase and the SEC started, the crypto exchange was always conservative in its token listing. Compared to other exchanges like Binance and FTX, Coinbase offers a little over 200 coins on its platform. Despite this, the SEC still believes there are unregulated securities on the Coinbase platform. CFTC commissioner Caroline Pham said the most recent securities fraud case is another reason for regulation by enforcement. Pham added that its high-time regulator worked together to set a framework to guide crypto assets. Coinbase’s Chief Legal officer also weighed in, saying:
“Instead of crafting tailored rules in an inconclusive and transparent way, the SEC is relying on these types of one-off enforcement actions to try to bring all digital assets into its jurisdiction, even those that are not securities.”
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