US SEC Investigates Whether Coinbase exaggerates the number of users before its IPO in 2021

PANews reported on May 16 that according to The Block, the U.S. Securities and Exchange Commission (SEC) is investigating whether Coinbase falsely reported user data before its listing in 2021. The SEC focused on reviewing the exchange's "100 million verified users" indicator claimed by the exchange in its direct listing registration documents, which was quietly discontinued two years later. Coinbase Chief Legal Officer Paul Grewal responded that this was a matter of investigation left over from the previous government, and the relevant indicators had been suspended and fully disclosed two and a half years ago.

In 2023, Coinbase stated in its securities filing that it will use "monthly trading users" instead of the "verified user" indicator, saying that the latter includes inactive users who only verify email or phone calls and cannot truly reflect business performance. However, in 2022, CEO Brian Armstrong still publicly claimed that the platform has 103 million verified users, emphasizing its position as the largest crypto trading platform in the United States. The investigation was launched during the Biden administration and continued to advance during Trump's tenure. It is worth noting that the SEC has recently revoked a separate lawsuit against Coinbase's "operating brokerage business without a license."