Coinbase Executives Discuss Ongoing SEC Conflict.

Coinbase discusses SEC conflict, unclear regulations

Coinbase executives Paul Grewal and Brian Armstrong have released a video covering the SEC’s ongoing issues with the company. Grewal stated that the regulator has no framework for regulating cryptocurrency companies, only to change its stance following concerns over FTX. Armstrong argued that the ongoing Wells notice is “not constructive,” and that the firm is committed to working within the regulatory perimeters — however, it is prepared to defend its viewpoint in court. Coinbase previously filed an action against the SEC on April 25 in an attempt to force the regulator to respond to its petition.

SEC accusing Coinbase of violation of securities laws

Coinbase has received a Wells notice from the SEC stating that the regulator is investigating the platform for potential breaches of securities law due to its loan programme offered to customers. Grewal commented on this saying that the accusations marked a surprise due to different authorities such as the Office of the Comptroller of the Currency having acknowledged its programme not being a security. Grewal stated that the SEC had previously allowed Coinbase to operate as a publicly traded company in 2021 without any fundamental changes, implying that SEC’s actions could not be to acclimatize to changes in Coinbase’s methods or new SEC findings. The platform has stated that it has not listed security products but is willing to enforce security trading in selected activities should it be called to do so by the regulator.

SEC needs to specify grounds for accusations to retract

No clear specification was given in the SEC’s Wells notice, with the agency providing a top-line accusation rather than a detailed outline of any concerns, which Coinbase are trying to decern in light of their differing interpretations of the law governing the sector. The platform opens itself to the possibility of litigation should the SEC not give clearer requests regarding the accusations’ advice for them. Coinbase feels confused by the lack of dialogue and aims for clarity on its supposed regulatory infractions as the pair discuss the video directed at clearing their name.
[h/t Mike Dalton]