The US Securities and Exchange Commission (SEC) has recently filed a lawsuit against Coinbase. The federal agency accused the crypto exchange of acting as a broker, national securities exchange, and clearing agency without requisite registration.

Additionally, the lawsuit alleges that several crypto assets offered on Coinbase, including leading cryptocurrencies like Solana, Cardano, and Polygon, are unregistered securities.

Coinbase, which has often positioned itself as a legally abiding participant in the unpredictable crypto sector, is now in the legal crosshairs of the SEC.

The allegations focus on the exchange’s failure to provide crucial investor protections. Consequently, encompassing safeguards against fraud, manipulation, adequate disclosure, and routine SEC inspection.

Read More: 46 Cryptos Deemed Securities by the SEC: Consequences of Trading Them

After the SEC’s announcement, Coinbase shares witnessed a significant downturn. The stock, labeled as COIN, plunged by over 18% in the pre-market trading session, dropping from $58.71 to a low of $47.

The adverse effect on Coinbase’s stock price underscores the financial implications of regulatory actions in the cryptocurrency industry.

This lawsuit comes on the heels of another SEC action against Binance, a major competitor to Coinbase. It also comes months after Coinbase disclosed receiving a Wells Notice from the SEC.

The Wells Notice is a tool the SEC uses to inform companies of impending legal investigations. The SEC’s actions against Coinbase and Binance may indicate a broader regulatory trend.

SEC Chair Gary Gensler has expressed a need for increased oversight in the crypto industry.

Investors are bracing for further volatility, with the SEC hinting at more potential lawsuits in the crypto space. As these regulatory pressures escalate, the crypto industry could witness a significant reshaping of its landscape.

It is clear that the SEC’s message is firm: compliance with securities laws is non-negotiable, regardless of the nature or novelty of the assets involved.

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, stated:

“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.”

The post Coinbase Stock Plummets 18% Pre-Market Following SEC Lawsuit appeared first on BeInCrypto.

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