Coinbase stock (NASDAQ: COIN) opened the market today on a bearish trend after the US Securities and Exchange Commission (SEC) launched investigations into the Coinbase crypto exchange.
According to reports, the SEC is probing Coinbase for improperly listing and allowing the trading of digital assets that should have been listed as securities.
At the close of the market on Monday (July 25, 2022) Coinbase stock was trading at $67.07. It traded down during the pre-market trading hours before plunging below $60 immediately after the market opened today.
Besides SEC’s investigations, Coinbase as an exchange had a poor performance during the second quarter of this year; something that made the stock loos more than 75% in value. In April the stock was trading at $180 meaning it has lost more than $130 in just two months. In June, Goldman Sachs bank also downgraded Coinbase stock to a sell while predicting a more difficult time ahead for the exchange.
What is the SEC probing Coinbase for?
The US SEC is probing Coinbase for allegedly allowing citizens of the United States of America to trade unregistered securities listed by the exchange as digital assets.
According to the SEC according to allegations it made in a separate insider lawsuit against Coinbase launched last week, Coinbase has listed seven cryptocurrencies that should actually be listed as securities.
Previously, Gary Gensler, the chair of the US SEC, had said that going by some of the cryptocurrencies that the exchange lists, it should be registered as a national securities exchange.
However, Coinbase criticized the SEC saying that it is to blame for not coming up with clear guidelines for determining if cryptocurrencies can be classified as securities. According to Coinbase’s chief policy officer, the current securities regulations cannot apply to digital currencies.
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