The Bitcoin logo is displayed on the screen of a Bitcoin ATM on November 10, 2021 in Los Angeles, California.
Mario Tama | Getty Images
Cryptocurrency prices were slightly higher Tuesday after the Securities and Exchange Commission sued crypto services provider Coinbase.
Bitcoin climbed higher by more than 1% to $25,891.00, according to Coin Metrics. Earlier, it briefly fell as low as $25,368.57, its lowest level since March. Ether ticked higher by 1%, to $1,826.64.
On Tuesday, the SEC filed a lawsuit in New York federal court alleging that Coinbase has been acting as an unregistered broker and exchange. The agency demanded that the company be “permanently restrained and enjoined” from continuing to do so.
“If there’s a real value in these crypto tokens then compliance will build trust and the business model might change,” SEC Chair Gary Gensler said in an interview with CNBC’s “Squawk on the Street” Tuesday. “What we’re doing at the SEC is pro-innovation because the capital markets really don’t work.”
“There’s a lot of work here for the crypto field but we stand ready to work to get them into compliance,” he added.
The complaint listed 13 crypto assets listed on Coinbase that could be considered “crypto asset securities” by the regulator, including popular coins Solana (SOL) and Polygon’s MATIC token, which fell more than 3% and 5%, respectively, on Tuesday. Cardano’s ADA token fell 2.8%.
The news came one day after the SEC alleged that Binance, the largest crypto exchange in the world by volume, and its co-founder, Changpeng Zhao, violated securities laws. Cryptocurrency prices fell Monday to their lowest levels since March following the complaint against Binance.
U.S. regulators have been cracking down on crypto businesses since the beginning of the year. Since January, the SEC has charged Kraken, Genesis and Gemini Trust with offering unregistered securities to investors.
It also issued a Wells Notice to Coinbase earlier this year warning the company of potential securities charges. Matt Hougan, chief investment officer at Bitwise Asset Management, called Tuesday’s lawsuit “an important event that investors can look toward” speaking to CNBC Monday evening.
“The [SEC’s] next step in the Coinbase direction is probably a signal that we’re past this period of regulatory dark clouds or at least getting to the end of it,” he said.
