Coinbase’s share price dropped as much as 17% following a lawsuit today by the U.S. Securities and Exchange Commission, which says the company operated its crypto exchange “as an unregistered national securities exchange, broker, and clearing agency”—and that it illegally failed to register its staking-as-a-service program.
Coming just a day after the agency charged Binance for operating an unregistered exchange and sneaking past trading controls, this is definitely a full-frontal assault on some of the biggest names in the crypto sector.
For the grisly details, I’ll direct you to articles on both suits (Binance here and Coinbase here) by my very busy colleague Leo Schwartz, who describes today’s announcement as “yet another blow to the reeling crypto industry, with Coinbase long presenting itself as a legally compliant player in the volatile sector.”
Here’s Coinbase chief legal officer Paul Grewal: “The SEC’s reliance on an enforcement-only approach in the absence of clear rules for the digital asset industry is hurting America’s economic competitiveness and companies like Coinbase that have a demonstrated commitment to compliance.”
And here’s SEC enforcement chief Gurbir S. Grewal: “You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: The consequences for the investing public are far too great. As alleged in our complaint, Coinbase was fully aware of the applicability of the federal securities laws to its business activities, but deliberately refused to follow them. While Coinbase’s calculated decisions may have allowed it to earn billions, it’s done so at the expense of investors by depriving them of the protections to which they are entitled.”
Meanwhile, outside Cryptoland, Microsoft will pay $20 million to settle Federal Trade Commission charges over its alleged violations of the Children’s Online Privacy Protection Act (COPPA)—which the FTC has been vigorously enforcing of late. The agency said Microsoft was collecting under-13s’ personal data before notifying parents and getting their consent; not telling parents what data it collects, why it collects it, and with whom it shares said data; and hanging on to the kids’ data for too long.
From my perch in Europe, I always find it remarkable how privacy protections available to everyone here are for some reason only available to kids in the U.S. At least the FTC is making sure to give teeth to the rules it has to work with.
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Data Sheet’s daily news section was written and curated by Andrea Guzman.
This story was originally featured on Fortune.com
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