Coinbase is now facing a new probe, as the crypto winter wages continue.
According to three people familiar with the probe, the US is looking into the allegations that the crypto-exchange platform let Americans trade digital assets which should have been registered securities.
Bloomberg reported that Coinbase is under severe scrutiny by the US Securities and Exchange Commission. This was due to the platform’s increase in the number and type of tokens it offers for trading.
This case is critical as Coinbase is still reeling from last weeks’ allegation that there was an insider trading conspiracy. A former company manager and two other individuals were sued by SEC.
Bloomberg reported that Coinbase and the SEC declined to comment.
Coinbase is the US’s largest trading platform. It allows Americans to trade over 150 tokens. Bloomberg reported that if these products are deemed securities, they may need to register with the SEC as an exchange.
It is necessary for the SEC to request a legal test to determine whether a digital asset constitutes a security. If investors contribute money to fund a company or make a profit, a token is usually considered to fall under the SEC’s purview.
Blockchain.News reported that Coinbase’s new derivatives division is attracting the attention of retail traders, who are interested in the “nano” bitcoin futures products. This comes amid the collapsed trading volumes.
The report said that Coinbase’s “nano” bitcoin futures product had volumes surpassing records for three consecutive days over the past week, even though its spot trading volume dropped from $200 billion in May 2021 and $59 billion in July.
In June, the nano bitcoin futures product launched.
Image source: Shutterstock