SEC sues Coinbase, shares drop 20% in premarket trade

  • COIN.us
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In a legal action filed on Tuesday morning, the Securities and Exchange Commission (SEC) brought a lawsuit against Coinbase, a cryptocurrency exchange, in a federal court in New York. The SEC claims that Coinbase has been operating as an unregistered broker and exchange, and is seeking a permanent injunction to prohibit the company from engaging in such activities.

As a result of this news, shares of Coinbase experienced a 20% decline during premarket trading on Tuesday. The company's stock had already dropped by 9% on Monday, following the SEC's announcement of charges against Binance, a competing cryptocurrency exchange, and its founder, Changpeng Zhao.

"We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions," said SEC chair Gary Gensler said in a statement.

Reference
www.cnbc.com

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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