Popular cryptocurrency exchange Coinbase has come under fresh scrutiny from the United States Securities and Exchange Commission. In a blog post yesterday, the exchange revealed that the regulator served it a “Wells Notice” regarding some of its listed virtual assets and services. A Wells Notice is a recommendation from a SEC official giving the regulator premise to take legal action against an organization for violating securities law.
Furthermore, Coinbase decried the development citing that the SEC official didn’t carry out enough investigation. Due to that, the Wells Notice didn’t provide enough information about how the exchange allegedly violated U.S securities law. Additionally, Coinbase explained how the regulator declined its request to specify which of its services is contradictory to the SEC’s regulations.
More so, Coinbase stated that notice surfaced despite its numerous attempts to establish a working relationship with the regulator. Part of these efforts according to the exchange are the registration proposals it submitted to the SEC. The exchange said the SEC ignored these proposal for no reason. According to the blog post, Coinbase said it has unwavering confidence in its business practices despite the query.
The exchange went on highlight how proper regulation will aid the growth of the industry as opposed to enforcement actions. However, Coinbase indicated that if needed it will seek more clarity about the regulatory functions of the SEC in court. Accordingly, the exchange submitted that the regulatory uncertainty in the U.S crypto space is getting worse.
Reactions to the development by top executive members of Coinbase
Meanwhile, top executives of the cryptocurrency exchange have reacted to the development. The CEO of the exchange Brian Armstrong regarded the tussle as a developement in reforming the U.S financial system. The CEO emphasized that the business activities of the exchange are in conformity with the law. Armstrong stated that the exchange will continue to prioritize the interest of its customers while hinting that Coinbase might seek redress in court.
In a separate tweet, the Chief Legal Officer of Coinbase, Paul Grewal said recalled how the exchange filled a petition with SEC, seeking more clarity. The CLO revealed how the SEC deliberately exempted itself from other regulators in the U.S that have regulated the exchange. Lastly, Paul Grewal echoed the position of Paul Grewal, stating that Coinbase will seek clarity from the court.