Coinbase executives revealed today that the crypto exchange has received a “Wells Notice” from the Securities and Exchange Commission, stating that after an investigation, agency staff plan to recommend some type of enforcement action. That could include charges or lawsuits, but none of that has happened yet.
According to Coinbase, the problem is “an undefined part of our listed digital assets, our Coinbase Earn staking service, Coinbase Prime, and Coinbase Wallet.” Paul Grewal, Chief Legal Officer at Coinbase shared a copy of the letter (PDF) that the company received from the SEC, complaining about that “Over the last 9 months, CB has met with the SEC more than 30 times, sharing details of our business to build a path to registration. During this time, the SEC has provided basically 0 comment on what to change or how to register. Instead, today we received a notice from Wells.”
Coinbase had similar notes when it received a letter from Wells about the Lend program before trying to launch it in 2021, saying the SEC had not provided clear information about what the security is or how the company could register. Grewal and Coinbase CEO Brian Armstrong tweet threads About the letter, he says that Coinbase prepared to defend its position (that the products it offers should not be considered securities) in court, but no lawsuits or injunctions have been filed so far.
For now, the company’s blog post tells customers and investors to “Rest assured that Coinbase’s products and services continue to operate as usual; today’s news does not require any changes to our current products or services.” “.
