The U.S. Securities and Exchange Commission (U.S. SEC) on Tuesday charged cryptocurrency firm Coinbase, Inc. Operating crypto asset trading platforms belonging to unregistered national stock exchanges, brokers and clearing houses. It also accused Coinbase of failing to register the offering of its crypto asset pledges and services.

According to the SEC, since 2019, Coinbase has illegally obtained billions of dollars by facilitating the buying and selling of crypto asset securities. The Commission claimed that Coinbase interwoven traditional services of an exchange, broker, and clearing house without registering those functions with the Commission as required by law.

The SEC argued that such actions did not protect investors and shielded exchanges from the commission's oversight. So the exchange's operating company, Coinbase Global Inc. Take responsibility for this.

The regulator further noted that Coinbase has been offering unregistered securities through its pledge as a service program since 2019. It is reported that through this project, the exchange brings together the crypto assets that each class of customers can bet on, conducts blockchain transaction authentication services with the betting pool, and gives part of the returns generated to the customers whose funds belong to the pool. However, Coinbase also failed to register with the Commission as required by law.

"We allege that Coinbase, while subject to securities laws, blended and unlawfully provided exchange, broker and clearing house functions," said SEC Chairman Gary Gensler. "In other parts of our securities markets, these functions are separate. Coinbase's alleged errors left consumers without key protections, including a rulebook against fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine SEC inspections. In addition, as we allege, Coinbase never registered its pledge as a service program as required by securities laws, once again depriving investors of critical disclosure and other protections."

A day earlier, the regulator also sued another cryptocurrency exchange, Binance.