The U.S. Securities and Exchange Commission (SEC) has issued subpoenas to Coinbase seeking documents and information regarding its crypto products.
Coinbase said Monday that the SEC is seeking information about how it goes about quoting specific assets as well as its operations and customer programs.
The investigation also seeks information about Coinbase’s staking programs as well as its yield-generating products, according to a note in the exchange’s quarterly report.
In a separate case, the regulator also charged Coinbase’s former product manager, Ishan Wahi, with insider trading.
Coinbase’s disclosure confirms a Bloomberg article from late July, which stated that an SEC investigation had been launched before the insider trading scandal, although the investigation into Coinbase’s staking programs and performance products was not reported at the time.
The SEC threatened to sue Coinbase last September over its loan account proposals, which allegedly offered up to 4% interest on USD coin deposits. Coinbase reversed those plans later that month after initial opposition. The company offers separate staking and yield programs on certain DeFi tokens.
Coinbase is facing multiple class-action lawsuits, including one alleging that it allowed its U.S. customers to trade in unregistered securities.
Another class action, filed in June, alleges that Coinbase breached its duty of care in listing the redesigned Terra Classic token and failed to disclose an alleged financial connection to Terraform Labs.
Despite a turbulent year, Coinbase said in its balance sheet that resolving its legal and regulatory issues with the SEC would not affect its financial results, health or operations. However, the company admitted that it was possible that the developments could have a negative effect on its operating results.
COIN shares were down about 5% Monday after its second-quarter earnings call, which showed a 35% drop in trading costs from the previous quarter.
Shares of Coinbase traded up more than 7% on Wednesday to about $94.14. Shares of COIN are up 49% for the month of August, buoyed by news of a partnership with asset manager BlackRock.