US SEC Launches Investigation into Coinbase for User Count Manipulation Allegations

The US Securities and Exchange Commission (SEC) has reportedly launched an investigation into allegations of user count manipulation by the cryptocurrency exchange Coinbase.

The New York Times (NYT) reported that the SEC has recently begun investigating allegations of user count manipulation by Coinbase. Specifically, the SEC is said to be reviewing Coinbase's past disclosures.

The period of interest for the SEC is 2021, when Coinbase was pursuing an initial public offering (IPO). According to the NYT, at that time, Coinbase listed '100 million' as the number of 'verified users' in its disclosures. However, this figure was removed from Coinbase's reports approximately two years later.

Coinbase maintains that it did not manipulate user counts. Paul Grewal, Coinbase's Chief Legal Officer (CLO), told The Block, "(The user count) is a metric already disclosed to the public," and described the SEC investigation as a residual inquiry from the previous (Biden) administration into a metric that was discontinued two and a half years ago.