The New Jersey Office of the Attorney General and the Division of Consumer Affairs on Tuesday announced that the Bureau of Securities issued a Summary Cease and Desist Order against Coinbase, alleging the cryptocurrency platform is operating as an unregistered securities platform and brokerage service.
This action does not prohibit Coinbase from offering staking securities, so long as it complies with New Jersey law, the news release states.
The purpose of registering an offering with the bureau before the offer and sale of securities, in part, is to ensure that investors receive all material information needed to evaluate the risks of participating in an investment, including in staking securities.
“The cryptocurrency securities market is not a free-for-all where companies can make up their own rules,” Shirley Emehelu, executive assistant attorney general, said. “These companies play up the rewards but are less likely to address the risks of investing in crypto and, through this action, we are making sure they comply with our rules.”
“The rules are clear. Anyone selling securities in New Jersey must register and comply with the state’s Securities Law,” Cari Fais, acting director of the Division of Consumer Affairs, said. “The Bureau of Securities will continue to protect investors by monitoring the marketplace to ensure that everyone is following the rules, especially when it comes to the ever-evolving digital asset market.”
“The bureau protects New Jersey investors by enforcing the state’s Securities Law,” acting Bureau Chief Amy Kopleton said. “This action is another step toward ensuring that investors in crypto asset products are also offered that protection.”
The action is the result of a multistate task force investigation by state securities regulators led by California that also includes several other states. The New Jersey bureau’s investigation was handled by investigator Delfin Rodriguez. The bureau is represented by Deputy Attorney General Evan A. Showell.