Leading American cryptocurrency exchange Coinbase answered to the notice that was received by the company from the US Securities and Exchange Commission (SEC) at the end of March. It said that the regulator considers the provision of Coinbase Earn services on the Coinbase Prime and Coinbase Wallet platforms as illegal trading in unregistered securities.
We are talking about the so-called “Wells Notice” – a formal letter from the SEC, in which recipients are informed that the agency is preparing to initiate legal proceedings against them.
Coinbase urged the regulator not to take enforcement action against the company for the sake of the reputation of the SEC itself. The fact is that the leading crypto player in the US market was allowed to become a public company and start trading on Nasdaq in 2021. According to Coinbase, being listed on the Nasdaq implies that the SEC considers the company’s business to be legitimate.
Coinbase also warned the SEC that the regulator could do reputational damage to itself if it continues to harass an exchange that takes a lot of effort to comply with all laws and regulations. This could set a bad example for other companies, as they will realize that all compliance efforts are in vain, and regulatory harassment in the US still cannot be avoided.
“The story that will be told is the story of a company that consistently tried to achieve clarity and comply with the law by voluntarily providing the Commission with data on its activities, only to have this information later used against it in a strange attempt to destroy a large part of the business,” they said. at Coinbase.
The company also claims that its platform does not place securities, the Coinbase Wallet product is not a broker, and the exchange’s staking services are not an offering of securities.
The SEC must decide if it will file charges against Coinbase. To do this, she has a little less than five months.
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