Coinbase Global Inc.
said it has received investigative subpoenas and requests from the U.S. Securities and Exchange Commission, pointing to potential further pressure facing the crypto exchange, after it posted wider-than-expected losses in the second quarter.
The crypto exchange said Tuesday it has received investigative subpoenas and requests from the SEC “about certain customer programs, operations, and existing and intended future products”, including its processes for listing assets, the classification of certain listed assets, its staking programs, and its stablecoin and yield-generating products, according to a quarterly filing.
Coinbase has been reportedly facing a U.S. probe into whether it improperly let Americans trade crypto that should have been registered as securities, according to a Bloomberg report in July.
In a shareholder letter also published Tuesday, Coinbase said the SEC in May sent the company a voluntary request for information, including its listings and listing process, but that the exchange doesn’t yet know if this inquiry will become a formal investigation. “We regularly get formal and informal questions from regulators about our views on the development of the cryptoeconomy, our products, and our operations,” the company wrote in the shareholder letter.
A spokesperson at the SEC said the agency does not comment on the existence or nonexistence of a possible investigation.
In July, the SEC announced insider-trading charges against a former Coinbase product manager, for allegedly tipping his brother and a friend to planned asset listings on the exchange before they were publicly disclosed. Though the agency didn’t accuse Coinbase of any wrongdoings then, it said nine of the 25 crypto assets involved in the case were securities, while seven of the nine coins were listed on Coinbase. Coinbase later pushed back on the claims that such coins were securities.
Coinbase shares gained 7.4% Wednesday, a day after the company said volumes and monthly user counts could be lower in the current quarter than in the last one, as crypto market activity remains soft. The company posted a net loss of $1.09 billion in the second quarter, while it recorded net income of $1.61 billion in the year-before quarter.