Just a few days after the United States Securities and Exchange Commission arrested two former Coinbase product managers after slapping them with charges of insider trading, the U.S. SEC is now investigating if the cryptocurrencies that were listed on Coinbase are securities. The SEC has increased their scrutiny on Coinbase since the cryptocurrency company expanded the number of tokens it offered for trading.

Bloomberg cited some sources that were familiar with the matter when they reported that the Security and Exchange Commission’s latest probe into Coinbase predates their investigation into the alleged insider trading scheme while led to the arrest of two former Coinbase product managers and two other people.

Head of Legal Affairs at Coinbase, Paul Grewal said that the Coinbase’s legal team is looking forward to working with the relevant legal authorities to ensure a positive outcome. He also said that Coinbase us confident that their rigorous due diligence which has been reviewed by the SEC competently keeps securities off the platform.

Recently, Coinbase boosted their token offerings significantly. The current number of tokens they offer for trading is 150. If the U.S. SEC can prove that any if those tokens are securities, Coinbase would be required to register with them. It was also reported that Coinbase had regularly asked the SEC to develop a framework for the identification of digital asset securities.

In a significant insider trading indictment, a former Coins product manager, Ishan Wahi, his brother and a third individual were arrested on 21st July 2021. During these period, Coinbase and the U.S. SEC clashed over the status of tokens such as ENS, GALA, POWR, and ALCX. The U.S. SEC classified them as securities but the U.S. Department of Justice and the Commodity Futures Trading Commission do not share the U.S. SEC’s view of the matter.

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