If it walks like a dog and barks like a dog, perhaps it’s actually a digital asset security

Coinbase, the U.S.-based cryptocurrency exchange that is the third-largest globally, is “facing a U.S. probe into whether it improperly let Americans trade digital assets that should have been registered as securities,” according to a Bloomberg report. The news follows a move by the U.S. Department of Justice last week to arrest and charge a former Coinbase employee and two others with wire fraud and wire fraud conspiracy, alleging they had front-run listings on the crypto exchange.

The U.S. Securities and Exchange Commission then separately filed securities charges against the ex-Coinbase employee for securities fraud based on its view that nine digital assets involved in the incident were securities, seven of which are listed on Coinbase, according to a blog post from Coinbase’s chief legal officer, Paul Grewal. Today’s Bloomberg report confirms that the broader SEC investigation into whether Coinbase let Americans trade securities had already been underway before the agency filed charges against the ex-employee.