Coinbase Global, the largest cryptocurrency platform in the US, was sued by the Securities and Exchange Commission (SEC) on Tuesday for allegedly violating the regulator’s rules and not registering as a broker.

The SEC has sued Coinbase after it sued the world’s largest crypto exchange Binance, over charges of mishandling customer funds and violating securities laws. 

The company announced on March 23 that it had received a warning notice from the regulator about potential upcoming enforcement action. Furthermore, the Securities and Exchange Commission contends that the company operated as an unregistered exchange. In the Manhattan federal court, SEC accused Coinbase was violating the regulator’s rules by allowing the trading of various crypto tokens, which were unregistered securities. 

Coinbase allegedly used its “staking” service that lets customers turn over their crypto tokens to facilitate transactions on a blockchain to get a return. This violates SEC’s rule.

Last year, Coinbase handled $830 billion in deals, with roughly nine million users making at least one monthly trade. The corporation defended itself by claiming that the SEC approved its initial public offering when it approved its business plan. 

Moreover, securities regulators in 10 states filed their actions on Tuesday against Coinbase, seeking to stop the company from selling unregistered securities to investors in their states. Some states also imposed fines on the company. 

With these federal and state-level lawsuits, Regulators want to reshape the securities market and treat these crypto exchanges like more traditional financial firms while pushing out individuals and companies they view as bad actors.