The cryptocurrency exchange said that the United States Securities and Exchange Commission was “misunderstanding” its listings and had no basis for pursuing legal action against its wallet.
On March 22, Coinbase warned of a “legal threat” that might affect its services, including its wallet, Coinbase Prime, and the staking program Coinbase Earn. Although a Wells notification letter typically forewarns a firm that the SEC may take enforcement action, Coinbase only mentioned “possible violations of securities laws” in its letter.
Paul Grewal, Coinbase’s chief legal officer, said the company had requested the SEC specify which assets on the platform it considered securities, but the SEC had failed to do so. Over many months, Coinbase made several offers to the SEC for registration, all of which were rejected in today’s Wells notice.
The cryptocurrency trading platform assured customers they might “use our products and services as usual,” notwithstanding the investigation.
The SEC has not raised any particular concerns about any asset on our platform throughout this examination. It’s pretty rare to switch to a Wells notice at this time.
On March 20th, Coinbase petitioned the SEC to argue that staking should not be automatically classified as a security. According to the platform, the SEC’s apparent interest in its wallet is based on a “misunderstanding of crypto products, assets, and services,” even though none of the listed assets on the exchange are securities.
A settlement between the SEC and Kraken had previously been disclosed, per which the crypto exchange will end its staking program for U.S. consumers. After the SEC announced legal action against Justin Sun and many celebrities for their promotion, offering, and sale of Tron and BitTorrent, news of the Wells notice soon followed.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.