On Thursday, in its formal response to a Wells Notice received from the Securities and Exchange Commission (SEC), Coinbase Global Inc. firmly stated that it has not violated any securities laws while operating in the country. The California-based crypto exchange was recently issued an official notification by the SEC stating that they were being investigated for the Earn product, wallet service, and exchange operations.
Coinbase Asserts No Rules Were Broken
During the course of the 14-minute video, CEO Brian Armstrong emphasized that the company was ready to defend their position in court, however, they are open to a “true dialogue to a workable path forward” for the larger crypto sector. While speaking about the Wells Notice received last month, Armstrong was quoted as saying:
A Wells Notice at this stage, when there is not a clear rulebook, is not constructive and it’s not good for America.
Chief Legal Officer Paul Grewal provided a list of a few pointers to demonstrate the company’s compliance with the securities law. These pointers highlight that the company does not list securities, follows a “robust process” as outlined by the SEC, and that it rejects over 90% of the crypto assets during an internal review prior to getting listed.
Coinbase’s Staunch Legal Stance
In a formal, 73-page response to the SEC probe that was released on Thursday afternoon, the attorneys for Coinbase were even more forthright in their statements. In the brief, the attorneys from Sullivan & Cromwell who represent Coinbase argued that the commission’s case against Coinbase “will fail as a matter of fact and law.”
The incident comes on the heels of a new video dropped by SEC Chief Gary Gensler where he warns U.S. customers of the risks associated with crypto platforms. Coinbase filed a petition with a federal court earlier this week in an effort to compel the SEC to state whether or not it intends to develop new regulations for digital assets. Lately, the financial watchdog has made a concerted effort to address what it views as lack of compliance on the part of cryptocurrency platforms and their intermediaries.
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