The US has charged the biggest crypto trading platform in the country with operating illegally, widening its crackdown on the industry.
The Securities and Exchange Commission said Coinbase had acted as a broker, exchange and clearing agency for investments that are subject to SEC rules, without properly registering.
The regulator said that had allowed the firm to escape oversight, including guards against conflicts of interest.
Coinbase said the rules were not clear.
“The solution is legislation that allows fair rules for the road to be developed transparently and applied equally, not litigation,” said Paul Grewal, Coinbase’s chief legal officer. “In the meantime, we’ll continue to operate our business as usual.”
The complaint against Coinbase comes a day after the SEC sued Binance, the world’s largest crypto trading platform, accusing the firm of mishandling customer funds, artificially inflating trading volume on the site and taking steps to evade US regulation.
Authorities have pledged to police the industry more aggressively using existing rules, arguing that many crypto assets function like other investments which are subject to oversight.
Efforts to increase scrutiny have picked up after last year’s dramatic collapse of another major exchange, FTX, which left many customers unable to access their funds.
On Tuesday, financial regulators from 10 states, including California and Alabama, also filed legal actions alleging that Coinbase was operating as an unregistered securities dealer.
“As alleged in our complaint, Coinbase was fully aware of the applicability of the federal securities laws to its business activities, but deliberately refused to follow them,” said Gurbir S Grewal, director of the SEC’s division of enforcement.
“You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: the consequences for the investing public are far too great.”