Bitcoin, Crypto currency, Blockchain

New Trouble in the case of Coinbase: the Broker has misappropriated client funds

6f04c00300febb97d90c68037a3e3d25 - New Trouble in the case of Coinbase: the Broker has misappropriated client funds

As is known now, has been compared in the March of 2018, a strategic Partner of Coinbase with the U.S. securities and exchange Commission SEC. Against payment of 80,000 US dollars, the charges against the company Electronic transaction was left Clearing (ETC). The SEC accused the company to have multiple funds of its own customers in danger.

At the beginning of July, the world’s largest crypto exchange Coinbase announced entirely new services. Coinbase Custody is a combination of a comprehensive customer care program, a Broker in addition to the secure storage of digital assets by means of Cold Storage. With this strategic step, the crypto-trade is a combined course with the services of hedge funds and other financial institutions. One of the strategic partners of the company, Electronic Transaction Clearing (ETC). According to the press release is to be applied in the case of Coinbase in the future, the Expertise System, ETC. Furthermore, the company and its broker’s license. The news service Bloomberg, a Coinbase spokesperson said, you need no official permission for the trade, because it is cooperating with the SEC-regulated Broker, ETC.

Coinbase-partners ETC: payment of a monetary penalty

The securities Watchdogs of the SEC under the authority of the strategic Partner of Coinbase, however, that the company had repeatedly infringed the customer protection rules. ETC has almost paid eight million dollars to the account of a different Clearing firm to settle their claims. In addition, funds of two ETC have been without consultation with the customer in the total amount of 17 million US dollars to third parties “borrowed” in order to save yourself from the trouble. Such a mixing is not permitted, because the customer protection rule States that the Broker must safeguard the securities of the investors against a possible loss. You should not use the securities just to Finance its own transactions. Against the payment of a fine of 80,000 US dollars, the lawsuit was finally released. ETC must now ensure that the authority of all the means for a complete education. In addition, the ETC must ensure that no more such conduct may be repeated.

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