Former SEC Official Says Coinbase Is Committing ‘Criminal Offense’

It’s been just reported the fact that the former SEC official said that Coinbase is committing a criminal offense. Check out the latest reports about this below.

A former high-ranking official at the U.S. Securities and Exchange Commission (SEC) said that Coinbase can’t use their initial public offering (IPO) approval as any credible defense in regard to their recent legal issues.

Just to refresh your memory, the SEC sued Coinbase last week, alleging the top US crypto exchange operated as an unregistered securities exchange, broker, and clearing agency.

Coinbase CEO Brian Armstrong quickly responded to the lawsuit on Twitter. He argued that the SEC “reviewed our business and allowed us to become a public company in 2021” when the regulator approved the exchange’s S-1 initial public offering.

On the other hand, John Reed Stark, who founded the SEC’s Office of Internet Enforcement and spent 11 years as its chief, argues that Coinbase’s IPO approval doesn’t imply that the SEC approves of everything that the company may do in the future.

“The goal of SEC review is to ensure that investors and potential investors have all the facts before buying a security, not to confirm that any business is legitimate. The SEC staff reviews registration statements to see if the SEC’s disclosure rules are satisfied – and that’s it.”

As the online publication the Daily Hodl notes the fact that the SEC does not evaluate the merits of securities offerings. It also determines whether the securities offered are ‘good’ investments or appropriate for a particular type of investor.

“Furthermore, the approval of a registration statement is not an SEC endorsement of its products or services or a statement that a registrant will lawfully operate its business.”

Stay tuned for more news from the crypto space, and make sure to check out the markets as well.