SEC Charges Major Exchange Over Unregistered Securities Offering

The Securities and Exchange Commission on Monday filed civil charges against one of the largest US-based digital asset exchanges, alleging that several of its yield and staking products constitute unregistered securities offerings under the Howey test.\n\nThe complaint, filed in the Southern District of New York, seeks disgorgement of allegedly ill-gotten gains, civil penalties, and a permanent injunction barring further sales of the products. According to the filing, the exchange marketed the offerings to more than 1.2 million US retail customers between 2021 and 2024.\n\n"Today's action underscores that the federal securities laws apply to all market participants, regardless of the labels they apply to their products," the SEC's director of enforcement said in a statement.\n\nThe exchange said it strongly disputes the agency's characterization and intends to defend the case vigorously. Industry analysts said the case is likely to clarify long-standing questions about which crypto products fall within the SEC's jurisdiction.