Regulators Initiate Legal Action Against Coinbase Amid Increasing Scrutiny on Crypto Industry in the US

Coinbase, the leading US crypto asset exchange, faces a lawsuit from American regulators, marking a growing clampdown on the digital token sector.

The US Securities and Exchange Commission (SEC) alleges that the exchange unlawfully conducted operations without initial registration with the regulatory body.

Coinbase’s stock plunged over 20% as Wall Street markets commenced trading after the lawsuit was lodged in a federal court in Manhattan.

This event followed closely on the heels of an SEC lawsuit against Binance, the world’s largest cryptocurrency exchange, and its founder, Changpeng Zhao.

Binance and Changpeng Zhao were accused of an elaborate deception network, with allegations of investor funds misuse, functioning as an unregistered exchange, and contravening multiple US securities laws.

According to data analytics firm Nansen, following these events, investors withdrew approximately $780 million (£628.4 million) from the crypto exchange within 24 hours.

Bitcoin, the world’s dominant cryptocurrency, has seen its price drop around 5% since Monday amidst the fallout.

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