Sources say Coinbase is under SEC investigation for its cryptocurrency listing.

According to three people familiar with the investigation, the crypto exchange platform is under investigation in the United States for inappropriately allowing Americans to trade digital assets that should have been registered as securities.

According to Bloomberg, Coinbase has come under intense scrutiny from the US Securities and Exchange Commission (SEC) following the platform's growth of the number of tokens available for trading.

This action comes at a critical time for Coinbase, which is still reeling from last week's allegation of an insider trading conspiracy in which the SEC sued a former firm manager and two other people involved.

Bloomberg reported that the SEC and Coinbase declined to comment.

“Coinbase, the largest US trading platform, allows Americans to exchange over 150 tokens. If those products were declared securities, the company might have to register with the SEC as an exchange ”According to Bloomberg.

The SEC is required to apply for a legal test to determine if a digital asset is a security. A token is generally considered to be SEC-regulated if it includes investors putting money up to fund a firm and profit.

However, according to a recent article from Blockchain.News, Coinbase's new derivatives section is attracting new retail traders who are interested in the crypto exchange's “nano” bitcoin futures products despite the company's declining trading volumes.

Coinbase's “nano” bitcoin futures product set three consecutive records in the last week, despite the fact that its spot trade volume fell from $200 billion in May 2021 to $59 billion in July, according to the report.

In June, the micro bitcoin futures product was introduced.

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