Coinbase blasts SEC over insider trading case, says none of the tokens it lists are securities

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Coinbase pushed back on claims from the Securities and Exchange Commission that it offers unregistered securities, following fraud charges against a former employee at the company.

An ex-Coinbase product manager was charged Thursday, along with two other individuals, with wire fraud in connection with an insider trading scheme involving cryptocurrencies. The case is the first of its kind.

U.S. prosecutors accused the individuals of plotting to profit from the listing of new tokens on the Coinbase platform before they were announced publicly.

In a separate complaint filed Thursday, the SEC said that nine of the 25 tokens allegedly traded in the scheme were securities.

Coinbase's chief legal officer, Paul Grewal, denied the claims Thursday in a blogpost titled «Coinbase does not list securities. End of story.»

«Seven of the nine assets included in the SEC's charges are listed on Coinbase's platform,» Grewal said in the blogpost. «None of these assets are securities.»

«Coinbase has a rigorous process to analyze and review each digital asset before making it available on our exchange — a process that the SEC itself has reviewed.»

Whether some cryptocurrencies should be considered securities is a contentious matter that has flustered both regulators and crypto firms alike.

Ripple, a San Francisco-based blockchain firm, is currently fighting a lawsuit from the SEC which claims XRP, a cryptocurrency it is closely associated with, should be treated as a security.

It goes back to a notable Supreme Court case known as the Howey Test, which deems an asset as a security if it meets certain criteria. According to the SEC, a security is defined as «an investment of money, in a common enterprise, with a reasonable