Housing Shitcoins is what brought the doom of Coinbase

The trouble seems never-ending for Coinbase since the department of justice charged a Coinbase manager with insider trading. The company, known as the "white knight of crypto" is currently under investigation by the SEC. Bloomberg's Max Chafkin places the blame on Coinbase's ill-advised decision some years back to "pivot to shitcoins." A familiar term in the crypto world, "shitcoins" typically refers to digital tokens that have no obvious utility beyond speculative hype. The Chafkin piece is illustrated not so subtly with coins bubbling out of a toilet.

Chafkin's broader point is that Coinbase spent years building its reputation, but then in a hurry destroyed all that by embracing shitcoins. This included promoting the likes of novelty coin Dogecoin to small and unsophisticated investors, many of whom have taken losses of 80% or more. Meanwhile, the decision to add shitcoins also opened the door for the rogue Coinbase manager's insider trading scheme. None of this is a good look for Coinbase. But on the other hand, the company faced an impossible dilemma: It could have stuck to offering Bitcoin and Ethereum even as rivals enticed away its customers with hundreds of new assets or, to stay competitive, could have offered shitcoins too. It chose the latter and now it's in trouble.

However, the experts are saying that it's easy to fault Coinbase's executives for this situation, but the ultimate blame lies elsewhere, specifically with the Securities and Exchange Commission (SEC). For years, Coinbase and others in the industry have begged the agency to offer clear rules on how the law of securities applies to the crypto realm. And for years, the SEC has refused to do so, instead pursuing a "regulation by enforcement" approach that has forced companies to guess what the agency will do.