Coinbase stock plunges 20% on SEC lawsuit

Coinbase Stock Plunges 20%

Coinbase’s stock fell 20% in the wake of a lawsuit filed by the Securities and Exchange Commission (SEC) over its alleged failure to register as a broker-dealer.

The SEC said Coinbase had failed to register as a broker-dealer when it began offering its services to customers in 2015. The lawsuit alleges that Coinbase violated the Securities Exchange Act of 1934 by failing to register as a broker-dealer.

The SEC also said Coinbase had failed to register as an alternative trading system when it began offering its services to customers in 2017. The lawsuit alleges that Coinbase violated the Securities Exchange Act of 1934 by failing to register as an alternative trading system.

Coinbase has disputed the SEC’s allegations, saying that it is not a broker-dealer and does not need to register as one. It also said that it is not an alternative trading system and does not need to register as one.

Coinbase’s stock has been volatile since the SEC’s lawsuit was announced, falling as much as 20% in the wake of the news. The company’s stock has since recovered some of its losses, but remains down from its pre-lawsuit levels.

SEC Lawsuit

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase alleging that the cryptocurrency exchange failed to register as a broker-dealer when it conducted its initial public offering (IPO) in April 2021. The SEC is seeking to recoup any profits Coinbase made from the IPO and impose a penalty.

The SEC’s complaint alleges that Coinbase violated the Securities Exchange Act of 1934 by failing to register as a broker-dealer when it conducted its IPO. According to the complaint, Coinbase offered and sold securities to the public without registering with the SEC, in violation of the law.

The complaint also alleges that Coinbase made false and misleading statements in its IPO prospectus, including statements about Coinbase’s business operations, financial condition, and risk factors. The SEC is seeking to have Coinbase disgorge any profits it made from the IPO, as well as pay a civil penalty.

Coinbase Response

Coinbase has denied the allegations and stated that it has always acted in accordance with applicable laws and regulations. The company has also argued that the SEC’s interpretation of the law is overly broad.