The U.S. Securities and Exchange Commission on Tuesday sued Coinbase (COIN.O), accusing the largest U.S. cryptocurrency platform of operating illegally because it failed to register as an exchange, in another blow to the crypto industry, APA reports citing Reuters.
The lawsuit is the SEC's second in two days against a major crypto exchange, following its case against Binance, the world's largest cryptocurrency exchange, and founder Changpeng Zhao.
Both civil cases are part of SEC Chair Gary Gensler's push to assert jurisdiction over the crypto industry, which he on Tuesday again labeled a "Wild West" that has undermined investor trust in the U.S. capital markets.
"The whole business model is built on a noncompliance with the U.S. securities laws and we're asking them to come into compliance," Gensler told CNBC.
Crypto companies say the SEC rules are unclear, and that the agency is overreaching by trying to regulate them.
Paul Grewal, Coinbase's general counsel, in a statement said the company will continue operating as usual and has "demonstrated commitment to compliance."
Ten U.S. states led by Californiaalso on Tuesday accused Coinbase of securities law violations concerning its staking rewards program.
Shares of Coinbase's parent Coinbase Global Inc were down $6.42, or 12.8%, at $52.29, after earlier falling as much as 20.9%.
Coinbase customers withdrew more than $57 million within a couple of hours of the SEC filing, the data firm Nansen said.