Reported by Steven Stradbrooke

Coinbase (NASDAQ: COIN) says it has been warned by the U.S. Securities and Exchange Commission (SEC) to expect imminent legal action for violating federal securities laws.

On Wednesday, Coinbase disclosed that it had received a Wells notice from SEC staff regarding a “preliminary determination” that the regulator should “file an enforcement action” against the digital asset exchange. The SEC believes it has identified securities violations relating to “aspects of the Company’s spot market, staking service Coinbase Earn, Coinbase Prime and Coinbase Wallet” products.

The SEC’s action has been expected for some time, particularly after civil and criminal charges were filed last July against a former Coinbase staffer caught trading on advance knowledge of which new tokens would be listed on the exchange. The SEC said at the time that “at least nine” of the tokens involved in the insider trading scandal were unregistered securities but CoinGeek believes there are other tokens being traded on the crypto platform that fall into the same category including BTC and Ethereum.

Read full report: https://coingeek.com/coinbase-wells-notice-sec-prepping-enforcement-action-for-securities-violations/