As one of the most popular cryptocurrency exchanges in the world, Coinbase has faced its share of scrutiny. The company has weathered multiple investigations by US regulators, as well as accusations of insider trading and claims that it violated its own terms of service. So, is Coinbase legal?
The short answer is yes, Coinbase is a legally registered company in the United States and is compliant with all applicable lAWS and regulations. However, that doesn’t mean that there haven’t been some bumps in the road.
Let’s take a closer look at some of the controversies surrounding Coinbase and see how the exchange has responded.
In March of 2018, the US Securities and Exchange Commission (SEC) launched an investigation into whether or not Coinbase had violated securities lAWS by allowing trading of certain cryptocurrencies on its platform. The SEC specifically mentioned Ethereum Classic (ETC) in its inquiry, which had recently been added to Coinbase’s list of supported assets.
Coinbase responded to the SEC’s investigation by stating that it had not violated any lAWS and that it would cooperate fully with the regulator. The exchange also announced that it would be suspending trading of ETC until the investigation was complete.
As of this writing, the SEC has not made any public announcement about the status of its investigation.
In November of 2018, New York Attorney General Barbara Underwood announced an investigation into whether or not Coinbase had engaged in any illegal activity related to its listing of certain cryptocurrencies on its platform. The inquiry was prompted by concerns that Coinbase may have misled investors about which assets it was actually allowing trading for.
Coinbase responded to the investigation by again stating that it had done nothing wrong and would cooperate fully with regulators. The exchange also announced that it would be delisting five cryptocurrencies – Bitcoin Gold (BTG), Ethereum Classic (ETC), Zcash (ZEC), Dash (DASH), and Stratis (STRA) – that were being investigated by the Attorney General’s office.
All five assets were subsequently delisted from Coinbase.
So far, Coinbase has weathering all legal challenges thrown its way. The exchange has remained compliant with regulations and has taken steps to ensure that it is operating within the bounds of the law.
While there have been some hiccUPS along the way, Coinbase appears to be on solid footing moving forward.