The US Securities and Exchange Commission sent a Formal notice suggesting enforcement action, according to cryptocurrency exchange Coinbase.
In a blog post on March 22, Coinbase stated that the "legal threat" might be directed against the exchange's Coinbase Earn staking programme, listed digital assets, its wallet, or Coinbase Prime services. The SEC may take enforcement action in response to a Wells warning letter, but Coinbase only mentioned "potential violations of securities laws" in its letter.
“We asked the SEC specifically to identify which assets on our platforms they believe may be securities, and they declined to do so,” said Coinbase chief legal officer Paul Grewal. “Today’s Wells notice also comes after Coinbase provided multiple proposals to the SEC about registration over the course of months, all of which the SEC ultimately refused to respond to.”
The cryptocurrency exchange stated that throughout the investigation, business as usual would apply to all of its goods and services. Grewal disputed the "come in and talk to us" strategy frequently mentioned by SEC Chair Gary Gensler, asserting that Coinbase met with SEC representatives "more than 30 times over nine months" but mostly received no comment on its plans.
On March 20, Coinbase filed a petition with the SEC in an effort to inform the authority that staking may not always be regarded as a security. The exchange asserted that none of the assets offered on its platform fell under the regulator's definition of securities, and that any prospective SEC targeting of its wallet was the result of a "misunderstanding of crypto products, assets, and services."
Editor - Sarah Fathima Ahmed
March 2023, CryptoniteUae