US SEC Probes Coinbase Over Unregistered Securities Allegations

Coinbase previously said it “does not list securities.” SEC chair Gary Gensler said it should be registered as a national securities exchange

article-image

Coinbase CEO Brian Armstrong | blockworks exclusive art by axel rangel

share

key takeaways

  • The SEC is determining whether Coinbase allowed US-based users to trade unregistered securities
  • The probe has wider implications should an SEC decision define certain crypto assets as securities

The US Securities and Exchange Commission (SEC) is looking into whether crypto exchange Coinbase allowed its US-based users to trade unregistered securities, Bloomberg reported Monday.

Coinbase, one of the largest exchanges in the world, allows users to trade more than 150 tokens on its platform. If those tokens were deemed securities, the exchange would have to register with the SEC, the regulator has warned.

The investigation is unrelated to the insider trading case involving cryptocurrencies on the platform allegedly linked to trades made by Coinbase’s product manager Ishan Wahi. The SEC has said that nine of the dozen digital tokens involved in case were securities, including seven that are listed on the exchange.

Questions around what constitutes a security or a commodity in crypto — as well as which regulator has jurisdiction (SEC or CFTC) — continue to trouble industry participants and providers who say they require clearer guidelines to operate.

SEC chair Gary Gensler previously said he believes Coinbase should be registered as a national securities exchange. Coinbase has denied its affiliation, claiming it “does not list securities. End of story,” in a blog post last week.

Digital assets will be considered securities if the token can help investors collectively fund a company with the intention of profiting from the employees that work at the organization, according to definitions laid out in the Howey Test.

Aside from bitcoin, which US regulators consider a commodity, the SEC has not specified which coins are securities and it is up to each exchange’s discretion to decide whether to list them for trade.

Exchanges are currently hesitant to register their offerings as securities because investor protection rules are complicated and incompatible with digital assets.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

morpho 2 graphic.png

Research

Utilizing a ‘DeFi Mullet’ approach, Coinbase’s Bitcoin-backed loans integration with Morpho demonstrates a powerful blueprint for CEXs to monetize dormant assets by expanding adoption of wrapped products (cbBTC, USDC) while also supporting native and/or preferred DeFi ecosystems (Base) which can further lead to downstream growth in onchain liquidity and increased utilization of the related assets.

article-image

The S&P 500 quickly erased gains spurred by optimism that President Trump may push back the start date for his new tariff policies

article-image

A new report from Centrifuge and Keyrock sets out the bull, bear and base cases for tokenized private credit and RWAs.

article-image

Exploring theories behind April 5, Satoshi’s cryptic “birth date” – and potential clues about his real age

article-image

The cell provider is offloading data to XNET’s Wi-Fi network

article-image

While overall VC spending is on the rise, web3 gaming’s being left in the dust

article-image

Tariff and interest rate concerns overshadowed a positive March jobs report