Coinbase Receives Cease and Desist Notices from 11 US States
Following the Securities and Exchanges Commission (SEC) lawsuit, US-based crypto exchange, Coinbase, has received multiple Show Cause orders from US states.
The Alabama Securities and Exchange Commission (ASC), alongside ten other US states, filed charges against Coinbase for violating securities laws.
States that joined the multi-state task force include Kentucky, Illinois, California, South Carolina, Washington, Vermont, Maryland, Wisconsin, New Jersey, and Alabama.
In a June 6 press release, the SEC announced it sued Coinbase for operating as an unregistered securities exchange, broker, and clearing agency.
The watchdog alleged that the crypto exchange violated securities laws by offering several digital assets not duly registered under the Securities Exchange Act of 1934 and 1933.
The SEC has filed its complaint in the US District Court for the Southern District of New York, seeking injunctive relief, disgorgement of ill-gotten gains plus interest, penalties, and other equitable relief.
In the press release, the SEC also recognized the assistance from the multi-state task force of ten state securities regulators led by California.
According to the state regulators, Coinbase operated some staking programs for residents in the eleven states without registering the underlying cryptocurrencies under US laws.
Alabama State Securities (ASC) officials said they did not prohibit Coinbase and other firms from offering staking services. However, they must comply with state laws.
The multiple Sow Cause Orders gave Coinbase a 28-day mandate to say why it should not cease trading crypto in the states.
That means Coinbase must prove with reasonable facts that its offerings are not unregistered securities.
Failure to do so, Coinbase
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