The SEC Lists 9 Tokens As Securities After Investigating Coinbase insider Trading

Sec calls Coinbase’s 9 tokens securities. This is one of the rare times that the SEC calls a token directly a security, these coins are likely to be delisted on many exchanges.

9 Coinbase Tokens Called Securities

As updated in an article by coincu News, former Coinbase product manager Ishan Wahi, his brother Nikhil Wahi and associate Sameer Ramani engaged in insider trading using confidential information. The secret that Ishan obtained from Coinbase regarding which tokens should be listed on the exchange, in order to make a purchase first.
During the investigation of the incident, 9 tokens were listed as securities by the SEC: Powerledger (POWR), Kromatika (KROM), DFX Finance (DFX), Amp (AMP), Rally (RLY), Rari Managed Token ( RGT), DerivaDAO (DDX), LCX and XYO.

These are 9 of the 25 different cryptocurrencies that the trio is said to have used to raise $1.1 million – in the form of securities.

While the SEC has identified cryptocurrencies as securities in the past, typically it did so in enforcement actions or settlements with the issuer. But this complaint on July 21 is the first time the SEC identified several cryptocurrencies as securities without charging the issuers – or, for that matter, the exchange listing the so-called securities.

In a tweeted statement, Commodity Futures Trading Commission (CFTC) Commissioner Caroline Pham called the action a “striking example of ‘regulation by enforcement.”

For its part, Coinbase said none of the cryptocurrencies it lists are securities, and pointed to a parallel Department of Justice action that “did not charge securities fraud.”

“The SEC charges are an unfortunate distraction from today’s appropriate law enforcement action,” 

The Coinbase blog post, which was originally published in April but updated Thursday, said

Coinbase separately filed a petition with the SEC asking for it to start a rulemaking process to detail how it would apply federal securities laws to crypto assets.

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