SEC Investigates Coinbase Exchange Regarding Crypto Yield, Staking Products

By: Michael Wilson

August 12, 2022 1:20 AM

Investors were informed by the company that it had been served with "investigative subpoenas" by the Securities and Exchange Commission.

U.S. securities regulators are reportedly investigating Coinbase Global (COIN), a publicly traded cryptocurrency exchange, for its token listing policies, staking initiatives, and yield-generating products, according to the company's most recent quarterly report.

According to Coinbase's 10-Q form, the [U.S. Securities and Exchange Commission] has issued investigative subpoenas and requests for documents and information about specific customer programs, operations, and current and planned future products. This includes the company's asset listing procedures, how some listed assets are classified, its staking initiatives, and its stablecoin and yield-generating products.

The disclosure emphasizes the criticism Coinbase receives for being a vocal (and strictly regulated) American cryptocurrency company. Despite its conviction that some tokens are not securities and are therefore free from the SEC's jurisdiction, it is under attack on many different fronts. In its continuing lawsuit against an ex-Coinbase employee accused of insider trading, the SEC has adopted a different stance.

Coinbase asserted in the filing that despite this, it does not anticipate that the investigations will "have a major detrimental effect" on Coinbase's financial situation.