Ten US states have issued a show cause notice to Coinbase after the US Securities and Exchange Commission (SEC) filed charges against the exchange. Furthermore, the Alabama Securities Commission also issued the document, giving the company 28 days to show why it should not be given a cease and desist order.
🇺🇸 Ten US states take legal action against #Coinbase for violating securities laws.
• New Jersey
• South Carolina
— Walletor (@walletorapp) June 6, 2023
The ten states that issued the order to Coinbase include:
- New Jersey
- South Carolina
In addition, the crypto exchange now runs the risk of getting an order to stop selling securities that haven’t been registered.
Exchange Facing Ten State Regulators
While in March, the SEC issued a Wells Notice to Coinbase because it thought that it had broken federal securities law. In the end, the warning proved accurate as the regulator charged the company with violations earlier today. Now, it looks like the state’s officials are all focusing on the company.
Ten US states have sent Coinbase a “show cause” letter, and in this case, a group of US states working together as a task force issued the notice to the exchange. This document grants the company a 28-day period to demonstrate why it should not receive a cease and desist order.
The Alabama Securities Commission’s notice has been made public, so the notice and the states involved are now known. In fact, the notice says that Coinbase “violates the securities law by offering its staking rewards program accounts” to people in the state.
The SEC took action against Coinbase after Binance was charged with the same thing. Furthermore, the event has also had an effect on the stocks of both exchanges. The stock of Coinbase has gone down by 17% since the SEC filed the case.