Nasdaq-listed cryptocurrency exchange Coinbase has accused the U.S. Securities and Exchange Commission (SEC) of making decisions regarding alleged legal violations “on the fly.”
The San Francisco-based crypto exchange has responded to a Wells Notice, which is a formal warning from the SEC’s Enforcement Division that may recommend a lawsuit against the company. In its response, it notes that the “threat of imminent litigation appears to be intended to pressure Coinbase to accept demands that the Commission simply does not have the authority to order.”
Coinbase also argues that the cryptocurrencies it lists are not securities, contrary to claims repeated by SEC Chairman Gary Gensler that most digital assets are securities under federal law.
The exchange has maintained that it consistently addressed the SEC’s questions about the securities status of listed assets. It also rebuts the SEC’s allegations that it is operating as a national securities exchange, brokerage, and clearinghouse simultaneously.
Coinbase already owns both a broker-dealer and alternative trading system (ATS), but needs SEC and Financial Industry Regulatory Authority (FINRA) approval to operate them.
The exchange has in the past asked a number of questions of the SEC, including about its asset listing process, the Wallet product and its staking services. The SEC has now alleged that all three of these types of products may be in violation of securities laws, despite raising no concerns at the time.
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- Source: https://www.cryptocompare.com/email-updates/daily/2023/apr/28/
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