In a letter to the cryptocurrency exchange platform Coinbase, the Securities and Exchange Commission (SEC) is requesting information from companies that sell and market cryptocurrency-based products, such as bitcoin and litecoin, as part of their offerings, the Wall Street Journal reports.
“If you do not comply with the request by June 18, 2019, we request that you stop providing such products to your customers,” the SEC wrote in the letter, which the WSJ obtained.
“The Commission has long warned that the risks associated with the use of cryptocurrencies for illicit transactions are real, and it will take action against any company that violates the law,” the WSJD adds.
The SEC has been ramping up efforts to combat illicit use of cryptocurrency, and the SEC has issued a series of guidance on the matter in the last year.
Last week, the SEC sent letters to Coinbase, Bitfinex, Kraken, and others warning them about the risks posed by using cryptocurrencies for money laundering and terrorism financing.
These companies have since responded with a letter, in which they said that their products have “always been carefully vetted to ensure the safety of their customers and customers are protected from unauthorized use of their products.”
The letter said that the companies are “committed to ensuring that we do not sell or sell products to individuals who may be involved in money laundering or terrorist financing.”
The SEC is also asking companies to stop using cryptocurrencies as a way to “fraudulently induce you to make a fraudulent purchase or otherwise engage in any fraudulent activity” that would cause your company to lose its ability to sell its products, the WSJC reports.
In response to the SEC’s request, Coinbase CEO Brian Armstrong said in a statement that he expects the SEC to “take actions that will make it clear to investors that our products and services do not violate the law.”
“We have been carefully vetting our products, processes, and systems and are committed to ensuring the safety and security of our customers and the people who use them,” he added.
Earlier this week, bitcoin exchange Kraken was forced to temporarily halt operations after regulators raised concerns about the use and trading of cryptocurrencies, according to CNBC.
The exchange announced on Thursday that it will be temporarily halting bitcoin trading and trading as a result of the SECs investigation.
The SEC letter is the latest move in a long-running dispute between regulators and bitcoin companies over the legality of their business practices.
Last year, the U.S. Securities and Market Commission sued Coinbase, saying that it had failed to disclose to its customers the risks of its cryptocurrency products.
In December, the European Commission warned the U of A against selling its campus and surrounding buildings to bitcoin companies because of the potential for money-laundering and terrorism-related activities.