Coinbase stock tumbles after SEC complaint against Binance

The 136-page complaint the SEC filed against crypto exchange Binance on Monday morning, alleging market manipulation, securities law violations, and fraud, can be taken as a template for any future complaint against Coinbase.

Why it matters: An SEC case against Coinbase has been expected at least since March when the exchange revealed it had received a "Wells notice" from the agency.

The big picture: We now have chapter and verse on exactly how the SEC thinks crypto exchanges are operating illegally.

What they're saying: Binance "unlawfully offered three essential securities market functions—exchange, broker-dealer, and clearing agency—on the Binance Platforms without registering with the SEC," says the complaint.

Our thought bubble: Coinbase did exactly the same thing — and also had its own staking product. If the SEC doesn't prosecute Coinbase along similar lines, it will leave itself open to accusations of having a double standard.

Zoom out: Coinbase has orders of magnitude more U.S. customers than FTX (now bankrupt) and Binance combined; it is also a publicly-listed company, regulated by the SEC, with its stock trading on the Nasdaq exchange.

The bottom line: The SEC looks like it's trying to set some clear precedents before going after Coinbase, the biggest kahuna in the U.S. market. If and when the SEC wins its case against Binance, expect Coinbase to be next.