Coinbase, a popular crypto exchange, is currently going through a significant investigation conducted by the United States Securities and Exchange Commission. The U.S. SEC is reportedly scrutinizing Coinbase for allegedly breaching or misstating consumer data in the 2021 IPO submissions. The SEC inquiry is examining whether the number of validated consumers of Coinbase has been exaggerated by it.
U.S. SEC Probes into Coinbase for Supposed Consumer Data Misstatement
As per the reports, the U.S. SEC is investigating Coinbase’s supposed misstatement of data regarding consumers in 2021 IPO submissions. In this respect, the crypto exchange has claimed to have more than 100M verified consumers. However, the respective figure is not consistent with Coinbase’s recent disclosures, according to the SEC.
Hence, the securities regulator is now delving into the details to clarify the authenticity of the information provided by Coinbase. This investigation, which reportedly began during the former U.S. President Joe Biden’s administration, pays considerable attention to the crypto exchange’s data metrics. While discussing this investigation, Coinbase’s Chief Legal Officer, Paul Grewal, categorized the probe as just a “holdover” matter.
Recent Data Breach Pushes Coinbase Stocks Downward
In addition to this, the executive also reassured the crypto exchange’s intention to cooperate with the regulator to resolve this issue. In the meantime, Coinbase is additionally focusing on the outcomes of a recently reported data breach. The public filings indicate that the sophisticated hackers stole the customer information, leading to a large ransom demand.
Subsequently, Coinbase has gone through a decline in stock trading activity, reflecting the turbulence. Particularly, on the 15th of May, shares dipped by more than 6% to reach $247 following the news. However, beyond Coinbase’s stock performance, the above-mentioned developments highlight a wider issue in the case of cryptocurrency regulation. This takes into account KYC, transparent reporting and compliance.
