Coinbase Implications: NY AG’s Push for Ethereum Security Classification in KuCoin Case

Newly uncovered documents show that the New York Attorney General’s office actively urged the SEC to classify Ethereum as a security during its 2023 enforcement action against KuCoin. This revelation highlights ongoing regulatory uncertainty surrounding ETH and could have significant implications for platforms like Coinbase that list the asset. While the SEC ultimately declined to take a public position, the request demonstrates heightened scrutiny of Ethereum by state regulators.

NY Attorney General Urged SEC to Classify Ethereum as Security in KuCoin Case

Newly disclosed documents reveal the New York Attorney General’s office pressed the SEC to declare Ethereum a security during its 2023 enforcement action against KuCoin. The request came via email from Investor Protection Bureau chief Shamiso Maswoswe to SEC Chair Gary Gensler’s chief of staff, seeking an amicus brief supporting the classification.

While the SEC ultimately declined to take a public position, the correspondence highlights regulatory tensions surrounding ETH’s status. New York maintains jurisdiction regardless of classification, as state laws cover both securities and commodities.

Coinbase Users Lose $45M in Social Engineering Scams, ZachXBT Reports

Blockchain investigator ZachXBT has uncovered another $45 million in losses by Coinbase users over the past week, attributing the theft to coordinated social engineering attacks. The scams exploit vulnerabilities in Coinbase’s user verification processes, with stolen funds traced across multiple blockchain networks.

Working alongside researcher Tanuki42, ZachXBT identified linked Bitcoin and Ethereum wallet addresses tied to the heists. The latest findings build upon previous investigations revealing a persistent pattern of phishing schemes targeting the exchange’s customers.

Coinbase’s compliance gaps continue to enable sophisticated attacks, as criminals refine their tactics to bypass security measures. The disclosed theft addresses reveal cross-chain movement of stolen assets, highlighting the need for enhanced safeguards in crypto platforms.