In a fiery response to the SEC’s Wells notice issued last month, cryptocurrency exchange Coinbase warned the federal regulator that taking enforcement action against the exchange would pose “major programmatic risks” and “fail on the merits” on Thursday.
On April 27, the top executives of the cryptocurrency exchange Coinbase brought the company’s regulatory difficulties to the attention of the general public. Chief Legal Officer Paul Grewal gave a presentation on the topic at Consensus 2023, and CEO Brian Armstrong appeared in a video that was uploaded to YouTube.
Coinbase, the most important cryptocurrency exchange in the United States, went public in 2021 by listing itself on the Nasdaq stock market. Since then, it has been a publicly traded corporation. The firm said that the SEC gave the impression that it did not consider Coinbase’s operation to be illegal by letting it to be listed on Nasdaq.
If the Commission had believed in April 2021 that Coinbase’s core businesses violated securities law, it would have been required by its own mandate to prevent the S-1 from becoming effective to protect the investing public.
the company wrote in its response
Coinbase also warned the financial watchdog that it would likely experience reputational loss from its “abrupt about-face,” if it seeks to go after Coinbase because of the company’s efforts to comply with rules and might dissuade other firms from prioritizing compliance.
The business responded to the SEC’s Wells Notice by stating that neither the exchange nor its staking services represent an offer of securities, nor does the Coinbase Wallet product constitute a broker.
The SEC staff will evaluate Coinbase’s answer and then suggest further steps to the agency’s commissioners. The enforcement plan will be put to a vote by the commission if the agency decides to go forward with it.
