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The SEC accused Coinbase of operating as an unregistered broker.

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Wall Street’s top watchdog is confronting some of the biggest names in crypto for alleged violations of US securities laws in a regulatory crackdown that is rocking the digital asset industry.

On Tuesday, the US Securities and Exchange Commission charged Coinbase, America’s largest crypto exchange, with operating as an unregistered broker. That complaint came less than 24 hours after he filed a similar lawsuit against overseas rival Binance.

“Since at least 2019, Coinbase has made billions of dollars by illegally facilitating the buying and selling of crypto asset securities,” the SEC said in a press release. “Coinbase engages in the traditional services of exchanges, brokers and clearing agencies without registering these activities with the Commission as required by law.”

Coinbase’s failure to register “deprived investors of significant protections,” the SEC said.

Coinbase CEO Brian Armstrong said on Twitter on Tuesday that the company is “proud to represent the industry in court to finally get clarity around crypto regulations.” But it also pushed back against the SEC, which said it approved the crypto platform business when Coinbase allowed it to go public in 2021.

“There is no way to come and register – we tried again and again.” he wrote “Instead of publishing a clear rulebook, the SEC has taken an enforcement approach that hurts America. So if we want to use the courts to get clarity, so be it.

In a statement to CNN, Coinbase’s chief legal officer, Paul Grewal, echoed Armstrong’s statement, adding, “The solution is fair laws that allow the road to be clearly laid out and enforced equally, not through litigation.”

Shares of Coinbase fell more than 12 percent on Tuesday.

Coinbase’s lawsuit follows a similar SEC complaint against Binance, the world’s largest crypto exchange. In the 24 hours after the agency sued Binance, investors collected about $790 million from the platform and its US affiliate, Nansen reported on Tuesday.

Binance saw $778.6 million worth of crypto tokens issued on the ethereum blockchain, with US partner Binance.US recording a net inflow of $13 million, Nansen tweeted.

A spokesperson for Binance said on Monday that the company takes the SEC’s allegations seriously, but believes the agency’s allegations are “unfair,” and that the company is being targeted because of its size and name recognition.

The growing theft of control is ratting crypto investors, who remain shaken by the implosion of FTX late last year, a rising star that flamed out spectacularly and is now the subject of a massive federal fraud investigation. Since then, the value of digital assets has increased and regulators have stepped up their scrutiny of the industry.

Crypto companies have long resisted classifying their products as traditional securities or commodities, arguing that they are an entirely new type of digital asset that requires laws and regulations. The SEC disagrees and says most crypto offerings are securities that should be treated the same way stocks and bonds are on Wall Street.

The lawsuits against two of the biggest names in crypto could help force judicial reviews, forcing the regulatory issue and, ultimately, prompting Congress to act.

“This litigation may not be positive for Coinbase, but it should be positive for the crypto space,” TD Cowen analysts wrote on Tuesday. “Regardless of what the judge rules, crypto should be brought to the final street rules.”

— CNN’s Matt Egan reports.