Coinbase Global's (NASDAQ: COIN) stock plunged 12% on Tuesday after the Securities and Exchange Commission (SEC) sued the cryptocurrency exchange for "operating as an unregistered securities exchange, broker, and clearing agency." The SEC alleges that Coinbase made "billions of dollars" by "unlawfully facilitating the buying and selling of crypto asset securities," and its failure to operate as a registered exchange "deprived investors of significant protections."

The SEC's move wasn't surprising since it had just filed a suit against Coinbase's competitor Binance a day earlier based on similar allegations. The SEC also previously blocked Coinbase's plans to launch an interest-bearing product in 2021, and repeatedly warned that it would expand its definition of "securities dealer" to cover cryptocurrency exchanges. The collapse of UST and Terra Luna, the bankruptcy of FTX, and other crypto disasters likely drove the SEC to accelerate its crackdown.

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Source Fool.com