US cryptocurrency trading giant Coinbase said on March 22 that it may soon face enforcement action over its possible listing of unregistered securities. The U.S. Securities and Exchange Commission (SEC) has filed a complaint alleging that the company’s operation of its exchange and staking services may violate securities laws.
The SEC sent Coinbase a so-called “Wells notice,” announcing that it planned to take actions such as suspensions and suspensions. However, no specific violations have been identified.
Will it be countered by the legal process?
“If necessary, we are considering a legal process to clarify what we have been alleging, that the SEC was neither fair nor reasonable with respect to crypto. Until then, business as usual.” Coinbase Chief Legal Officer Paul Grewal said in a statement.
“We believe these potential enforcement actions relate to our spot market and staking services Coinbase Earn, Coinbase Prime and Coinbase Wallet,” Coinbase said in its SEC filing. .
Wells notices are preliminary and do not necessarily lead to enforcement action. The company has until March 29 to notify the SEC whether it intends to refute the SEC’s findings that it likely violates securities laws.
Coinbase said in a blog post on May 22 that its cryptocurrency listing process is not subject to notification. CEO Brian Armstrong also tweeted about the Wells notice on the same day.
1/ Today Coinbase received a Wells notice from the SEC focused on staking and asset listings.
—Brian Armstrong (@brian_armstrong) March 22, 2023
Today, Coinbase received a Wells Notice from the SEC focusing on staking and asset listings. Wells notices generally precede enforcement actions.
Ambiguous regulatory structure and criticism
A source told CoinDesk that Coinbase has reached out to the SEC more than 60 times with various inquiries about cryptocurrency listings, but the SEC declined to give any advice or answer questions. It says.
Coinbase has publicly criticized the SEC for its vague regulatory structure, and in July petitioned the SEC to explain how cryptocurrencies could be compliant with securities laws.
SEC Chairman Gensler has said many times that he believes the cryptocurrency exchange operates as an unregistered stock exchange in the United States, saying that the majority of the many cryptocurrencies the exchange lists are It is similar to securities, he said.
Coinbase shares fell more than 11% after trading hours on the news.
The SEC also filed a lawsuit against Tron founder Justin Sun on Thursday, alleging that the crypto assets Tron (TRX) and BitTorrent (BTT) are unregistered securities.
｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
| Image: Coinbase CEO Brian Armstrong (CoinDesk archives)
｜Original: SEC Warns Coinbase It’s Pursuing Enforcement Action Over Securities Violations