A task force of 10 US state regulators are taking action against crypto exchange Coinbase (COIN) for allegedly violating state securities laws with its staking program. The California Department of Financial Protection and Innovation (DFPI) has filed for an order for Coinbase to desist and refrain from the further offer and sale of securities in California.
The Alabama Securities Commission (ASC) has given Coinbase 28 days to explain how it is not violating state securities laws with its staking program. The ASC’s show cause order alleges Coinbase and its parent corporation Coinbase Global broke the law by offering the staking rewards program Earn to state residents.
The task force of states taking action against Coinbase includes Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington and Wisconsin. ASC Director Amanda Senn said in a press statement, “The ASC is committed to protecting Alabama consumers and investors, including those who choose to invest in the decentralized finance space. This action is another step toward ensuring that investors in crypto asset products are offered the same protections under our laws and are fully aware of the risks involved in these investments.”
The ASC issued a similar order to now-bankrupt crypto lender Celsius back in 2021, also suspected of violating state securities laws with its Earn Rewards program.