American crypto exchange Coinbase has responded to the latest regulatory action from the Securities and Exchange Commission (SEC).
On April 27, Coinbase released a video in response to the Wells Notice issued by the SEC. The company was hit with the Wells Notice on March 23 as the regulator ramped up its war on crypto.
A Wells Notice is a letter from the SEC confirming its intention to bring an enforcement action against the company. At the time, Coinbase Chief Legal Officer Paul Grewal said they were “disappointed that the SEC is considering courts over constructive dialogue.”
In his response to the regulator, Grewal said that the SEC claims the rules are clear, but many crypto company executives disagree.
“The CFTC and SEC have issued conflicting views; Courts have questioned the SEC’s lack of guidance; and the SEC itself, just last week, couldn’t answer basic questions before Congress.”
Coinbase Prepared to Fight
Furthermore, he added that the SEC has still not complied with the law by providing crypto companies with a way to register.
“We do not relish litigation against the SEC, but we will vigorously defend ourselves – and stand up for the rule of law for everyone.”
Coinbase CEO Brian Armstrong joined his colleague, stating that the firm is committed to working in the regulatory perimeter. However, he said that a clear market structure is needed, adding:
“A Wells Notice at this stage when there is not a clear rule book is not constructive and its not good for America. We are prepared to defend that position in court, but it doesn’t have to come to that.”
Armstrong concluded by calling for dialogue as opposed to enforcement.
Finally, Grewal finished off the presentation by stating that Coinbase has repeatedly asked the SEC for guidance on its services. “To be candid … we’ve mostly got silence in response,” he said.
Seeking Clarity
On April 24, Coinbase took action against the SEC in the form of a federal court filing. The company only wants the SEC to respond to a pending rulemaking petition. Moreover, Coinbase filed the petition in July 2022, asking the regulator to provide overdue guidance for the crypto industry.
It has been met with silence while Gary Gensler and his squad of enforcers continue to crack down on the crypto sector.
On April 19, the firm announced that it had been granted a regulatory license to operate from the Bermuda Monetary Authority. Armstrong also hinted that a move offshore is on the table should America’s war on crypto escalate.
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