Before sending today’s Wells Notice to the most prominent cryptocurrency exchange, the United States Securities and Exchange Commission explicitly targeted certain Ethereum-based alternative cryptocurrencies that are traded on Coinbase.
In a lawsuit that it brought against a former employee of Coinbase for insider trading in July, the SEC identified nine crypto assets that it considers to be securities. Of those nine assets, six are still being traded on the exchange as of today.
Amp (AMP), LCX (LCX), Power Ledger (POWR), Rally (RLY), XYO Network (XYO), and DerivaDAO are the coins in concern (DDX).
At the time, Coinbase vehemently refuted the assertion that the cryptocurrencies listed above are securities. As justification, the company cited the “rigorous” and “SEC-reviewed” procedure it uses to decide which assets are allowed to be listed on its exchange.
Today, the SEC served Coinbase with a Wells Notice, which asserts that the agency has made a preliminary assessment that recommends the agency launch an enforcement action against Coinbase. The SEC made this announcement today.
According to Coinbase, the notice targets a “unknown amount” of its listed digital assets. Also, the notice targets the company’s staking tool, Coinbase Earn, as well as its institutional arm, Coinbase Prime, and its non-custodial wallet, Coinbase Wallet.
The exchange has stated that it would be happy to defend its products in court if that were to become necessary and has mentioned that it is continuing to conduct business as usual on all fronts.
The announcement was made in the midst of a turbulent day for Bitcoin and the cryptocurrency markets, which were reacting to a recent increase in interest rates by the Federal Reserve of a quarter point.
At the time of this writing, the price of one Bitcoin (BTC) was $27,397. This is a decrease of 2.7% over the course of the previous twenty-four hours.
