Coinbase Drops 30% After SEC Lawsuit As Users Pull Out $57.7 Million
- Coinbase value falls almost 30% to $49.
- Since the SEC announcement, users have pulled out over $57.7M across multiple chains from the exchange.
Coinbase’s value has fallen almost 30% to $49 as the SEC accuses Binance and Coinbase of breaking the rules by allowing unregistered securities to be traded. Users have withdrawn over $57.7M, excluding Bitcoin.
Coinbase has been hit hard by the Securities and Exchange Commission’s (SEC) lawsuit. The platform’s stock has plummeted by almost 30%, falling to $49.
The SEC has accused Coinbase of breaking its rules by allowing users to trade numerous crypto tokens that were unregistered securities, thus evading regulations. As a result, the SEC is seeking an order that would require the exchange to comply with securities laws and give up what the agency says were ill-gotten gains.
Since the SEC announced their lawsuit, users have reportedly pulled out over $57.7M across multiple chains from Coinbase, excluding Bitcoin. A significant portion of this amount, precisely $43.1M, is from Custody.
The platform’s staking service has also been accused of breaking the agency’s rules. This product allows customers to turn over their crypto tokens to facilitate transactions on a blockchain, which then pays a return to the customer. The SEC alleges this offering was unlawful, despite Coinbase being subject to securities laws.
Interestingly, the SEC did not bring charges against Coinbase CEO Brian Armstrong or other executives. This contrasts the charges against Binance, the world’s largest crypto platform. The SEC sued Binance for broader violations, including mishandling customer funds, breaking securities rules, and misleading investors and regulators. The growing crackdown on digital currencies could push them back to the fringes of the US financial system.
Binance Founder CZ Comments on SEC’s Lawsuit Against Coinbase: “If you have to pick a fight with everyone, maybe you are the one at fault.”
Coinbase had previously received a warning notice from the regulator about a coming enforcement action on March 23. Despite this, the lawsuit has become a significant blow to the platform, impacting its value and reputation. While the situation continues to develop, it is clear that the SEC is taking a strong stance on ensuring that crypto platforms comply with securities laws and regulations.
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