Following charges issued against the exchange by the US Securities and Exchange Commission (SEC), Coinbase has been issued a show cause notice by ten US states. Moreover, the Alabama Securities Commission issued the document, granting the company 28 days to prove why it should not be issued a cease-and-desist order.
The ten states issuing the order to the company include Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin. Additionally, the exchange is now at risk of receiving a cease-and-desist order for the sale of unregistered securities.
JUST IN: 🇺🇸 Ten US states take legal action against #Coinbase for violating securities laws.
• New Jersey
• South Carolina— Watcher.Guru (@WatcherGuru) June 6, 2023
Coinbase Now Facing State Regulators
Back in March, the SEC issued Coinbase a Wells Notice regarding its alleged violation of federal securities law. Subsequently, that notice came to fruition, with the regulator charging the company with violations earlier today. Now, it appears as though state regulators are turning their attention to the company.
Coinbase has been issued a show cause notice by ten US states following charges issued by the SEC. Specifically, a task force of US states has banded together to issue the notice to the exchange. This document grants the company 28 days to prove why it should not be issued a cease and desist order.
The notice from the Alabama Securities Commission has gone public, divulging the notice and the states involved. Indeed, the notice states that Coinbase “violates the securities law by offering its staking rewards program accounts” to the state’s residents.
The action the SEC has taken against Coinbase follows similar charges levied against Binance. Moreover, both exchanges have seen their stocks affected by the development. Coinbase stock has fallen 17% since the SEC lawsuit was filed.