Since officially launching in 2012, Coinbase has become one of the world’s most respected and trusted cryptocurrency exchanges. But, the venerable exchange may be in for some trouble after the U.S. Securities and Exchange Commission (SEC) put them on notice regarding potential action.
In the first quarter of 2021, Coinbase’s stock price skyrocketed after the company’s public debut on the Nasdaq exchange. But now, recent changes to their business model have raised eyebrows at the SEC. Coinbase recently launched “Coinbase Earn”, a program that allows customers to learn about new cryptocurrency assets and earn rewards while they do so.
The SEC’s stance is that Coinbase Earn may have been operating as a unregistered securities offering and a violation of the SEC’s registration provisions. This could potentially put Coinbase in the hot seat and could lead to enforcement actions by the Commission. Coinbase’s legal team is currently monitoring the situation and working to address the SEC’s concerns.
It isn’t just Coinbase that’s been in the news lately. The entire cryptocurrency industry is buzzing with news and developments. Here are some of the latest updates:
• The IRS has officially released its 1040 Schedule 1 form for 2021, which now includes a section for reporting cryptocurrency transactions. It is the first time ever that the IRS has included a specific space for crypto users to report their activity.
• Crypto trading platform eToro announced that it has launched a new retail trading platform in the United States. The platform will allow users to trade more than 15 cryptocurrencies, including Bitcoin, Ethereum, and Litecoin.
• The governments of Israel and the United Arab Emirates have agreed to launch a cryptocurrency pilot program to promote trade between the two countries. The program is set to begin in the first half of 2021.
These news items illustrate that the cryptocurrency landscape is rapidly evolving. Coinbase is just one of many players in the crypto space, and their situation with the SEC should be followed as other exchanges may be nudged to take similar action. Crypto investors should keep their eyes peeled for the latest news from the SEC and other industry players, as well as any potential changes that could affect their portfolios.
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