The United States Securities and Exchange Commission (SEC) has served Coinbase with a Wells notice. The exchange firmly believes it is in the right and appears disheartened by the lack of clarity from the regulator.
Coinbase has become the next major exchange to receive a Wells Notice from the United States Securities and Exchange Commission (SEC). The exchange published a post saying that it had requested the SEC to publish some clarifications regarding the rules, only to be served with a legal notice.
Coinbase did not hide that it received a legal notice when it tried to obtain information about whether it was doing everything right. The Wells notice was given in connection with “an undefined portion of our listed digital assets,” Coinbase Earn, Coinbase Prime, and Coinbase Wallet.
The Exchange will continue to offer these services as there is no order to suspend or discontinue any of them. A Wells notice is not a formal charge, but informs a company that the SEC recommends action be taken for possible violations of the securities laws. Coinbase notes that it had made several requests regarding registration, saying,
“Today’s Wells notice does not provide us with a lot of information to respond to… We asked the SEC to specifically identify which assets on our platform may be securities, and they declined to do so. Today’s Wells notice also comes after Coinbase made several proposals to the SEC regarding registration over the course of months, all of which ultimately the SEC declined to respond to.
The exchange is confident that it can handle any legal issues and should it be able to prove that “the SEC has not been fair or reasonable when it comes to its engagement with digital assets.”
Brian Armstrong believes the exchange is correct
Coinbase CEO Brian Armstrong also spoke of the development on Twitter, saying that the Wells notice precedes enforcement action. He noted that the SEC reviewed the business and approved the exchange to go public. He is confident that Coinbase is in the right, though he admits that such developments are “part of the journey to reform our financial system.”
Armstrong also says that the legal process will make it clear that the SEC has not been fair or reasonable. CEOs have proven resistant to what they consider unfair enforcement of regulatory action, and that continues here.
Coinbase Exec Expresses Disappointment Over Unproductive SEC Talks
Coinbase Chief Legal Officer Paul Grewal also Express Frustrated over the notices, he revealed that the exchange has met with the SEC more than 30 times in the past nine months. Grewal said Coinbase tried to work with the agency, but did not receive a response.
Coinbase stock is down nearly 8% over the past day following the notice. It’s probably a knee-jerk reaction to the news, as Coinbase is confident it can handle any action.
In other news, the SEC has also sued Justin Sun for unregistered securities offerings. This clearly indicates that the agency is going after the major players in the space.
disclaimer
BeInCrypto has reached out to the company or the person involved in the story for an official statement regarding the recent development, but has yet to hear back.