American publicly traded company and cryptocurrency exchange Coinbase Global Inc is likely to face charges for some of its digital asset products.
Currently, the United States regulator, the Securities and Exchange Commission (SEC) is investigating the crypto exchange and has issued a Wells Notice to keep Coinbase informed. According to Coinbase, the Well Notice pointed at services like the company’s exchange, its staking service, Coinbase Earn as well as Coinbase Wallet.
“Today, we are disappointed to share that the SEC gave us a “Wells notice” regarding an unspecified portion of our listed digital assets, our staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet after a cursory investigation,” Coinbase said in its blog post while also adding that “Today’s Wells notice does not provide a lot of information for us to respond to.”
Coinbase explained how the SEC staff mentioned to them that some potential violations and a “little more” had been identified in its system.
Last month, Coinbase already sensed some threats from the U.S. regulator as regards its staking service, and Brian Armstrong, the Chief Executive Officer (CEO) of the exchange responded to the SEC. As per Armstrong’s response, Coinbase staking services are not securities.
Coinbase Prepares For Legal Battle
In the case of a legal battle, the Coinbase CEO also said he was ready to defend his stance in court if the need arises. Again, Paul Grewal Coinbasr Chief Legal Officer reiterated Armstrong’s sentiment.
“We are prepared for this disappointing development. We are confident in the legality of our assets and services, and if needed, we welcome a legal process to provide the clarity we have been advocating for and to demonstrate that the SEC simply has not been fair or reasonable when it comes to its engagement on digital assets.”
Additionally, Coinbase explained that over many months, the SEC has refused to respond to all of its registration requests. Coincidentally, this happens to be the same time when the U.S. is cracking down on crypto entities. Last month, Binance USD (BUSD) issuer Paxos also received a Wells Notice and faced the possibility of being charged by the SEC for listing unregistered securities.
