Coinbase (COIN) Probed by SEC Over User Number Misstatement Concern

The SEC has been investigating crypto trade Coinbase (COIN) over whether or not it misstated its consumer numbers in previous securities filings and advertising supplies.

The probe started below the previous presidential administration whereas the SEC was nonetheless below the management of then-Chair Gary Gensler, based on the NYT, which first reported the story, however has persevered below the SEC’s present, crypto-friendly management.

The metric on the coronary heart of the investigation is Coinbase’s declare to have over 100 million “verified users.” It stopped utilizing the metric in each disclosure and advertising supplies in 2021, the yr it went public on the Nasdaq.

Paul Grewal, Coinbase’s chief authorized officer, informed CoinDesk in an emailed assertion that the SEC’s investigation is a “hold-over investigation from the prior administration about a metric we stopped reporting two and a half years ago, which was fully disclosed to the public.”

“We explained that the verified users metric includes anyone who verified their email address or phone number with us, so it may overstate the number of unique customers,” said Grewal “We also disclosed – and continue to disclose – the more relevant metric of ‘monthly transacting users’ – the number of people who use our platform in a given month.”

“While we strongly believe this investigation should not continue, we remain committed to working with the SEC to bring this matter to a close,” Grewal added.

The SEC didn’t reply to CoinDesk’s request for remark by press time.

Already below strain on account of at the moment’s disclosure of a knowledge breach, COIN shares dipped a bit additional on this SEC information, now down 6.6% on the session.