One of the largest cryptocurrency exchange platforms, Coinbase, is still defending itself against the US securities regulator, who said that the particular crypto exchange company would be a “well-resourced adversary” if sued.
The US Securities and Exchange Commission sent this notification last month, implying that the agency is considering taking enforcement action. Coinbase fired back at the notice.
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The Clap Back
On the other hand, Chief Legal Officer Paul Grewal of Coinbase claimed that they are still likely to avoid the lawsuit, stating that it “didn’t pick this fight.” The said exchange platform clapped by saying, “If the Commission pursues this matter, it will face a well-resourced adversary that will necessarily be motivated to exhaust all avenues.”
Additionally, the relevant exchange platform has stated that it does not wish to pursue legal action against the Commission; consequently, the relevant regulatory body does not wish to pursue legal action against them.
The assertion that none of the tokens featured on Coinbase’s platform are securities is still standing. Additionally, Coinbase has asserted that the SEC is only attempting to provide clear regulatory guidelines rather than actually attempting to engage with the industry.
According to recent reports, Coinbase has already filed a lawsuit with a federal appeals court in Philadelphia, Pennsylvania, asking the court to order the SEC to reply to the exchange’s demand for more definite crypto regulation standards, which was submitted in July 2022.
The aforementioned lawsuit demands that Coinbase’s rulemaking petition be addressed by the regulatory body despite the fact that they have already stated their intention to take enforcement action against Coinbase for purportedly offering unregistered securities.
SEC Chair Gary Gensler, on the other hand, reaffirmed that the majority of digital assets are securities and that crypto businesses must abide by the existing, unambiguous regulations. He added that cryptocurrency businesses serve as exchanges, brokerages, and clearing houses, among other roles, simultaneously. Gensler stated that this “creates conflicts of interest that undercut our tried-and-true investor protections.”
In light of this, Coinbase has already received the Wells warning. A “Wells notice” is a formal notification that the SEC sends to a recipient telling them that the agency intends to take enforcement action against them for probable violations of the securities laws that the corporation may have committed, such as acting as an unregistered exchange, clearing agency, or broker. This kind of enforcement may endanger Coinbase’s very existence and the way it now conducts business.