Key aspects of CZ and related companies alleged by the SEC to have violated the U.S. Securities Act and Exchange Act include: 1) issuing and selling unregistered securities; 2) influencing trading in unregistered securities on the Coin platform; 3) combining core securities market functions and knowingly evading registration; and 4) clearly violating conflict of interest principles.

If the SEC action works, the relevant penalties may include: 1) permanent prohibition of further violations; 2) restitution of the proceeds of the violations; 3) prohibition of the channels and means of interstate commerce (i.e., commerce rights) of CZ and related subjects from being used to engage in the relevant unlawful business; 4) imposition of civil penalties on the defendants; and 5) appropriate compensation for the benefit of investors.