SEC Still Hounding Coinbase Over Biden-Era User Verification Probe—Because Nothing Says ’Financial Innovation’ Like Endless Paperwork

Coinbase can’t shake off the SEC’s lingering scrutiny—the Biden administration’s probe into its user verification practices remains active, casting a shadow over the exchange’s compliance claims.

Regulatory purgatory: While Coinbase insists it’s playing by the rules, the SEC keeps digging into how the platform vets users. No resolution in sight—just the usual bureaucratic slow-roll.

Bonus jab: Nothing turbocharges crypto adoption like a government agency treating KYC forms as if they’re the Dead Sea Scrolls.

Verified users

The exchange disclosed that the SEC is investigating its previously reported “verified users” metric, a figure that has appeared in company filings and marketing material and once topped 100 million.

Coinbase Chief Legal Officer Paul Grewal said in a statement to CNBC:

“This is a holdover investigation from the prior administration about a metric we stopped reporting two and a half years ago, which was fully disclosed to the public.”

He explained that the now-retired metric counted users who verified an email or phone number, potentially overstating the number of unique customers.

Grewal added that Coinbase has since shifted to reporting “monthly transacting users,” a metric still disclosed in its earnings reports, and said the company is working with the SEC to close the investigation.

Shifts at the SEC

The inquiry is unfolding as the SEC undergoes a leadership shift under President Donald Trump’s administration, which has taken a more crypto-friendly posture compared to its predecessor.

However, the continuation of the probe suggests lingering regulatory scrutiny over crypto firms’ disclosures and public-facing data.

The company’s challenges deepened after it revealed a security breach involving stolen customer information and a $20 million ransom demand. Coinbase said the incident could cost up to $400 million to address, adding to investor concerns.

Despite the setbacks, Coinbase has made significant strides in recent weeks. The exchange announced an acquisition aimed at expanding its global presence and is set to enter the S&P 500 index next week.

During its recent first-quarter earnings call, CEO Brian Armstrong said the company intends to become “the No. 1 financial services app in the world” within five to ten years.