U.S. Tightens Noose On Coinbase, Binance

The top US securities regulator sued cryptocurrency platform Coinbase on Tuesday, the second lawsuit in two days against a major crypto exchange, Jonathan Stempel, Hannah Lang and John McCrank reported for Reuters.

Photo Insert: The SEC accuses Binance and its CEO Changpeng Zhao of operating a "web of deception."

The suit could transform a market that has largely operated outside regulation. On Monday, the US Securities and Exchange Commission (SEC) took aim at Binance, the world's largest cryptocurrency exchange.

The SEC accuses Binance and its CEO Changpeng Zhao of operating a "web of deception."

If successful, the lawsuits could transform the crypto market by asserting SEC's jurisdiction over the industry, which for years argued that tokens do not constitute securities and should not be regulated by the SEC.

"The two cases are different, but overlap and point in the same direction: the SEC's increasingly aggressive campaign to bring cryptocurrencies under the jurisdiction of the federal securities laws," said Kevin O'Brien, a partner at Ford O'Brien Landy and a former federal prosecutor.

He added the SEC has not previously taken on such major crypto players. "If the SEC prevails in either case, the cryptocurrency industry will be transformed."

In its complaint filed in Manhattan federal court, the SEC said Coinbase has since at least 2019 made billions of dollars by operating as a middleman on crypto transactions while evading disclosure requirements meant to protect investors.

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