The US Securities and Exchange Commission (SEC) issued a Wells notice to Coinbase, a popular cryptocurrency exchange, indicating that the regulatory body may take enforcement action against the business.
This notice came after a brief inquiry into unspecified digital assets listed on Coinbase and its staking services Coinbase Earn, Coinbase Prime, and Coinbase Wallet, according to a blog post published by Coinbase earlier today. The exchange assures users, however, that its products and services will continue to work normally, and the Wells warning does not necessitate any adjustments.
Coinbase argues that the SEC has supplied minimal information on potential securities law breaches and that it has frequently requested clarification from the SEC on which assets on its platform may be considered securities. Despite multiple proposals by Coinbase to register with the SEC, the regulator is said to have neglected to respond.
Coinbase maintains its confidence in its business procedures, claiming that rulemaking and legislation are better suited to establishing the law in the cryptocurrency industry than enforcement measures. If required, the corporation is willing to seek clarification in court.
Coinbase claims to have met with the SEC more than 30 times in the last nine months to discuss a registration path, and the exchange maintains that it does not list securities on its site.
Coinbase argues that it does not list securities on its site and that it has a strict process in place for assessing and reviewing each digital asset before listing it. Around 90% of assets assessed by Coinbase are reportedly not published because they do not fulfill the company’s standards. Hundreds of assets that did not match these requirements were rejected by Coinbase.
According to Coinbase, it originally submitted its staking services to the SEC in 2019 and again in 2020, but the regulator remained mute until the recent probe. According to the exchange, its staking services are not securities under any legal criterion, including the Howey test.
Coinbase encourages policymakers to develop clear standards and registration procedures for the industry as the US crypto regulatory landscape remains murky. Threatening enforcement steps against compliance actors, according to the business, will drive innovation, jobs, and the entire industry overseas. Coinbase maintains its confidence in the legitimacy of its assets and services and is willing to go to court to demonstrate the SEC’s unjust and irrational approach to digital assets.