US Securities and Exchange Commission has taken action against 9 crypto securities. A complaint was made against the manager of Coinbase, accusing him of insider trading by the federal securities. The manager allegedly gave his brother tips and confidential information about the exchanges associated with the assets. Per the SEC’s directions, the 9 crypto assets were actually the security-listed entities.
Even before the SEC sanctioned some of the cryptocurrency tokens as securities, it was done for a completely different reason. The motive behind doing this was for settlement. But this was the first incident when SEC took a different route for making cryptocurrency as security. This time no issues have been changed from the end of SEC. The nine tokens listed as securities by the SEC were AMP by Flexa, RLY, DDX, XYO, RGT, LCX, POWR, DFX, and KROM.
When SEC was sent the questionnaire about their action on Thursday, the body refused to make any statement. The biggest question is whether or not the SEC is taking all the issuers under this action. One of the officials of the SEC stated that the investigation is still under process. The Commissioner of CFTC also said in his tweet that this action is an incredible instance of ‘regulation by enforcement.
Later the attorney Jason Gottlieb said that the issuers are not considered as the parties of this action. These issuers are like Coinbase. Indirectly, this also ensures they have no right to challenge the action of the SEC in court. So even if the decision will have a determining effect on them, they will still not be able to directly make any moves against it, at least for now.
Coinbase also said in its blog post that the charges imposed by SEC are a deviation from the proper law enforcement. The SEC complaint was 62 pages long, including all nine tokens. It also stated these tokens’ considerations as securities per the Howey test.
