SEC serves Wells Notice to Coinbase
Coinbase has published an official statement after being served Wells Notice by the SEC. While it is not a legal case yet, it shows the direction where the warning could move on to. According to the statement, the notices come after Coinbase raised concerns about drafting reasonable rules for the crypto market.
1/ Today Coinbase received a Wells notice from the SEC focused on staking and asset listings. A Wells notice typically precedes an enforcement action.
— Brian Armstrong (@brian_armstrong) March 22, 2023
The venture has claimed that the notice is nothing but a legal threat. It could be the very opposite since Coinbase later put forward an assumption that the notice is the result of a disagreement among the SEC itself.
Wells Notice relates to the staking service of Coinbase in addition to Coinbase Prime, Coinbase Wallet, and digital assets listed on the platform.
The listing of digital assets is a rather interesting point. Coinbase claims that the SEC is unresponsive to the query about which digital asset is specifically the concern. Justified, an entire list coming under consideration for any type of action appears to be a long shot. Every mechanism has remained the same since Coinbase went public after receiving approval from the SEC.
Calling it a disappointing development, Coinbase has said that the investigation is in the early stages with no effect on its products and services. The community can engage with the platform as usual. Wells Notice is merely a recommendation that the SEC could take action for violating security laws.
Again, Coinbase has pursued the SEC for clarification; however, the SEC has not yet responded to the queries.
Coinbase is not taking this development lightly. The firm has expressed its confidence in the way it conducts business. One can read our Coinbase review to know more about the working and functionalities of the platform. It has also been reiterated several times by Coinbase that hardly anything has changed since it went public following the SEC’s approval. Furthermore, the Crypto regulatory atmosphere of the US needs better and improved guidance and not enforcement.
A recap tells us that the SEC had approached Coinbase earlier to register some portion of it with the Commission. Coinbase did agree and also proposed two models for platforms to register themselves. Feedback was sought but never received in 30+ meetings both parties held in the last nine months.
Coinbase has produced two witnesses and documents in its support, citing that assets listed on the platform are not securities. Looks like the ball is again in the Commission’s court.
Per the official statement, Coinbase is not the only platform that is suffering the confused wrath of the Commission. The Chair of CFTC earlier testified that Ethereum is a commodity. The community understood that a long time ago, adding that the SEC has no authority over it or the venue where it is traded. Coinbase has also said that courts are equally angry over the confusion within the SEC.
Circling back to Coinbase receiving Wells Notice, any further development is yet to be seen from the Commission’s side. It will break the internet whenever the SEC or Coinbase publicizes the development.