Coinbase CEO Says Exchange Is Preparing To Go To Court Against The SEC• April 21, 2023 11:26 am • Comments
It looks like Coinbase is already preparing itself for the possibility that it may have to go to court against the SEC in the near future.
Previously, the SEC had issued Coinbase a Wells notice which is basically the final step that the SEC takes before it formally issues charges.
As a result, the CEO of Coinbase, Brian Armstrong, commented on the situation and said that they still have not gotten any information from the SEC on what they think are the issues.
This is quite concerning at it seems that the SEC is targeting crypto businesses without any strong justification which is what they did with Ripple in the past.
Armstrong stated that they had already met with the SEC over 30 times last year and have tried to stay compliant with all their requests as much as possible.
Even then, it seems that this is not enough.
Coinbase CEO says the crypto exchange is preparing to go to court with the U.S. SEC https://t.co/qgCsliWFdF
— James Rule 👊😎 (@RuleXRP) April 18, 2023
“We’ve met with them over 30 times in the last year … never got a single piece of feedback from them about what we can be doing better or differently, and then this Wells Notice arrived,” Armstrong told CNBC in an interview.
“I think we’re going to have to actually end up going to court to get the clarity we need and create the case law.”
Case law refers to judicial precedent.
The SEC has ramped up its scrutiny on crypto firms, going after companies it alleges are offering unregistered securities. The SEC is using enforcement actions to target firms.
One of its most high profile lawsuits is with a company called Ripple, which has been going on since 2020. The SEC alleges Ripple sold unregistered securities. Ripple disputes the claim.
Based on the SEC’s history, it seems that Coinbase’s assumption that they will have to prepare for many years of battle against the SEC in the court will likely be correct.
These recent actions are also likely accelerating Coinbase’s plans to diversify into overseas operations and even looking at relocating.
The most likely reason that the SEC will give if they do press a formal charge is that they will accuse that various crypto assets are considered securities.
Of course, some of those assets will be under the Coinbase platform which gives the SEC a reason to initiate a lawsuit.
Overall, Armstrong called the entire situation ‘unfortunate’, but is prepared to do whatever it takes to survive the uncertain regulatory environment.
Gary Gensler (Chairman of the SEC) is no longer openly saying ETH is a security.
Congress wants clarity on securities laws in crypto.@coinbase is threatening to leave US unless there is more clarity.
They're also preparing to go to court with the SEC.
It's coming. Soon. https://t.co/RLyUqRvjGo
— Mintplex Labs (@mintplexnft) April 18, 2023
“The UK is actually a very good one for us,” said the CEO. The region, he noted, is Coinbase’s second-highest revenue country, and its leaders have expressed promising interest in turning the nation into a Web3 hub.
Coinbase in particular is under fire from the SEC, which issued the firm a Wells Notice earlier this month, which is a notice warning of the intention to sue the company.
It stated that Coinbase had violated federal securities laws, which Armstrong suspects are related to the assets listed on the exchange, as well as its staking as a service product.
The CEO said that the SEC had never notified the exchange about what it could be doing better to remain compliant across 30+ meetings over the last year.
“I think we’re going to have to actually end up going to court to get the clarity we need and create the case law,” he said, referring to judicial precedent.
Coinbase CEO Says Crypto Exchange is Preparing for SEC Lawsuithttps://t.co/160hLH9Zlg
— NFT Maker Online (@NFTmakeronline) April 19, 2023
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