Coinbase sues SEC after months of silence from federal regulator (2024)

FAQs

What happens if the SEC wins against Coinbase? ›

Why it matters: If the SEC's argument that most cryptocurrencies are securities under U.S. law prevails in court, it would limit who can hold them, or use the new asset class. It would also be an existential threat to the exchange — and, in fact, the cryptocurrency industry itself (at least, within the United States).

Coinbase Global Inc. (COIN) suffered a setback as a judge denied the company's motion to dismiss a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) for violating securities laws. 1 The company's stock dropped as much as 4.8% on Wednesday but eventually gained some lost ground.

US District Judge Katherine Polk Failla ruled that under federal securities laws, “the SEC has sufficiently pleaded that Coinbase operates as an exchange, as a broker, and as a clearing agency under the federal securities laws, and, through its Staking Program, engages in the unregistered offer and sale of securities.”

The decision is a blow to Coinbase and other cryptocurrency players who have argued the SEC has no power to regulate them because they don't traffic in “securities” that have to be registered. The judge, however, dismissed claims that Coinbase's Wallet application acts as a broker under the US law.

The Securities and Exchange Commission scored a major win in its lawsuit against Coinbase. A judge ruled that the SEC's claim that the cryptocurrency exchange engaged in unregistered sales of securities could be heard by a jury at trial.

Coinbase sends Forms 1099-MISC to the IRS and to traders who made more than $600 in crypto rewards or staking. $600 is the current Coinbase IRS reporting threshold. This may be subject to change in future years.

The ownership structure of Coinbase Global (COIN) stock is a mix of institutional, retail and individual investors. Approximately 29.66% of the company's stock is owned by Institutional Investors, 10.30% is owned by Insiders and 60.04% is owned by Public Companies and Individual Investors.

Update as of November 20, 2023: We have completed the phased migration of Coinbase Pro customers to Coinbase Advanced. Starting on November 20, 2023, Coinbase Pro will no longer be supported on web and mobile, and customers will not be able to login.

Total debt on the balance sheet as of December 2023 : $2.99 B. According to Coinbase's latest financial reports the company's total debt is $2.99 B. A company's total debt is the sum of all current and non-current debts.

High fees compared to competitors: Many reviewers believe that Coinbase charges relatively high fees when compared to other platforms in the industry. Users express dissatisfaction with these fees, especially considering that they are imposed on top of the fees already charged by crypto networks.

How much has Coinbase lost? ›

Coinbase profit

Coinbase lost $2.6 billion in 2022, a huge swing for the company which reported $3 billion in net profit the previous year.

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Securities and Exchange Commission (SEC): The SEC oversees the issuance and sale of securities, including digital assets that meet the definition of securities. This means cryptocurrencies that meet the criteria to be considered securities must be registered with the SEC and comply with its regulations.

Coinbase carries crime insurance that protects a portion of digital assets held across our storage systems against losses from theft, including cybersecurity breaches.

How are my digital assets insured? Coinbase carries crime insurance that protects a portion of digital assets held across our storage systems against losses from theft, including cybersecurity breaches.

Exchange Regulation

The global and borderless nature of cryptocurrencies necessitates cross-border collaboration. Exchanges listing securities tokens must register with the SEC as national securities exchanges. This regulatory control ensures that these platforms operate securely and within legal boundaries.