Kraken and Coinbase under the knife of American lawmakers

Two cryptocurrency exchanges, Coinbase and Kraken, have come under intense scrutiny from US regulators for listing unregistered securities and circumventing US sanctions, respectively.

To Report Bitcoin Magazine, regulators are scrutinizing digital currency exchanges day by day.

Coinbase Global Inc. has faced the investigation of the US Securities and Exchange Commission (SEC) following the recent accusations made against the company’s former product manager due to his involvement in insider trading.

The commission’s current investigation into Coinbase will determine whether the exchange allowed U.S. citizens to trade cryptocurrencies that should be listed as securities, three different sources said. As mentioned in the previous reports of this commission, this investigation is related to the arrest of the former product manager of this exchange.

Ishan Wahi, a former employee of Coinbase, together with his brother and another person, uses the secret information related to the list of certain tokens for more profit in the digital currency market.

At the time of Wahi’s arrest, the SEC did not charge Coinbase with secret trading and did not hold it accountable for the actions of the former employee of the exchange. However, according to this legislative body, the 9 tokens used for insider trading are considered securities. Coinbase admits that the platform has listed 7 of these securities in a blog written by the company’s chief legal officer, Paul Grewal; But it rejects the fact that those assets are included in Bahadur’s bonds.

Grewal writes in this context:

The accusations raised by Bahadur Stock and Securities Commission indicate the existence of an important legal problem. The United States does not have a clear or enforceable regulatory framework for digital asset-type securities, and instead of creating appropriate rules in a comprehensive and transparent manner, the SEC relies solely on these types of enforcement actions to subsume all digital assets, even those which are not securities.

After announcing the review of Coinbase’s securities list, Kraken has also been investigated by the United States Treasury Department due to the fact that sanctioned users in Iran and other restricted areas are able to buy digital currencies on this exchange.