Coinbase Receives Wells Notice from SEC, Could Face Enforcement Action

Coinbase crypto exchange has announced that it has received a Wells Notice from the US Securities and Exchange Commission (SEC). The notice warns that the regulatory body may take enforcement action against the exchange after conducting a brief investigation into undisclosed digital assets listed on Coinbase and its staking services.

Despite the notice, Coinbase’s products and services will continue to operate as usual, and the company claims that the SEC has provided little information on the potential violations of securities laws. Coinbase states that it has repeatedly asked the SEC to clarify which assets on its platform may be considered securities, but the regulator has declined to provide feedback.

Coinbase maintains that it does not list securities on its platform and that it has a rigorous process for analyzing and reviewing each digital asset before listing it. The company asserts that it has rejected hundreds of assets that failed to meet its strict criteria, and over 90% of assets reviewed by Coinbase are not listed.

The exchange remains confident in its business practices and asserts that rulemaking and legislation are better suited for defining the law in the crypto industry than enforcement actions. Coinbase urges regulators to establish clear rules and registration paths for the industry and warns that threatening enforcement actions against compliant actors will drive innovation and jobs overseas.

As the US crypto regulatory landscape remains uncertain, Coinbase is prepared to engage in a legal process to demonstrate the SEC’s unfair and unreasonable approach to digital assets. The exchange reiterates that it does not list securities on its platform and is confident in the legality of its assets and services.