(Bloomberg) – Coinbase Global Inc. said it stands for federal and state investigations as the largest U.S. cryptocurrency exchange seeks to go public through a direct listing.
The company, which is reported to be valued at more than $ 100 billion in recent private transactions, has been under investigation since 2017 by the Commodity Futures Trading Commission, Coinbase said Thursday in a filing. Coinbase also received a Securities and Exchange Commission subpoena as late as December to obtain information about its activities. It is common for companies seeking to be made public to disclose any regulatory probes as potential risks.
The legal headache comes as Coinbase seeks to ride Bitcoin’s meteoric rise to what is expected to be one of the biggest initial public offerings this year. Coinbase’s revenue more than doubled last year from 2019, when it swung to a profit amid a boom in cryptocurrency trading.
U.S. regulators have filed high-profile lawsuits against cryptocurrency platforms since the growing industry began in 2017. A possible lawsuit or settlement with Coinbase, which says it has 43 million confirmed users, would likely be one of the most significant regulatory issues. actions to date. .
Coinbase, SEC and CFTC declined to comment.
Coinbase detailed a number of topics of interest to CFTC investigators. The company said the three-year probe covers areas, including an event in the Ethereum market, trading in 2017 by an employee who has since left the company, listing the Bitcoin Cash product, and how the platform manages liquidity using algorithms.
Coinbase said the company, executives, former employees and some directors have received CFTC subpoenas and that it is cooperating with all investigations.
The exchange also received an investigation summons from California’s Attorney in 2019 seeking documents related to business practices, customer complaints and other issues. The firm said it received a similar request from Massachusetts’ top attorney. California AG declined to comment, while the Massachusetts office did not return a request for comment.
(Updates to CFTC, California, refusing to comment in fifth, eighth paragraphs.)
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