Illinois Secretary of State Alexi Giannoulias is accusing a cryptocurrency platform of violating state securities laws. Giannoulias is taking action against Coinbase, saying the company failed to register its offerings with the state, which would have given consumers more ability to evaluate the risks involved with such investments.
The charges center on the practice of “staking,” where digital assets are held on a “blockchain” in order to process transactions and produce a return on investment.
The state says 140,000 Illinoisans invested a total of $228 million in the unregistered securities, which were also not federally insured, further increasing the risk to investors.
The state has scheduled a hearing in August to determine if Coinbase will be banned from operating in Illinois and will face fines for its conduct.
