The U.S. Securities and Exchange Commission (SEC) today charged Coinbase, Inc., the largest crypto asset trading platform in the U.S., with operating a crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency as well was failing to register the offer and sale of its crypto asset staking-as-a-service program (the Complaint). Regulators across the world are increasing their oversight of new and emerging securities and crypto carbon offerings should heed the recent actions of the SEC and carefully examine whether their offerings constitute unregulated securities. This bulletin briefly summarizes key details of the Complaint.

The SEC’s Complaint alleges that Coinbase intertwines the traditional services of an exchange, broker, and clearing agency without having registered any of those functions with the SEC as required by law. The Complaint alleges that since 2019, Coinbase has:

  • provided a marketplace and brought together the orders for securities of multiple buyers and sellers using established, non-discretionary methods under which such orders interact;
  • engaged in the business of effecting securities transactions for the accounts of Coinbase customers;
  • provided facilities for comparison of data respecting the terms of settlement of crypto asset securities transactions, served as an intermediary in settling transactions in crypto asset securities by Coinbase customers, and acted as a securities depository; and
  • engaged in an unregistered securities offering through its staking-as-a-service program, allowing customers to earn profits from the “proof of stake” mechanisms of certain blockchains and Coinbase’s efforts.

The SEC stated that Coinbase’s actions “deprive[d] investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC” and that its failure to register its staking-as-service program “depriv[ed] investors of critical disclosure and other protections.”

The Complaint follows yesterday’s similar charges, including several alleged securities law violations, against beleaguered Binance Holdings Ltd., which operates the world’s largest crypto asset trading platform.

For further information to discuss the contents of this bulletin, please contact Lisa DeMarco at


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