In its formal response to a lawsuit threat received from the regulator, Coinbase Global maintained to the U.S. Securities and Exchange Commission that it had not violated any securities laws, the company stated on Thursday.
In a video statement to the SEC made public on Thursday, Coinbase CEO Brian Armstrong and Chief Legal Officer Paul Grewal stated that the cryptocurrency exchange would like to list securities in the future but would not feel comfortable given the regulatory ambiguity.
Grewal stated that Coinbase “does not list securities.”
The SEC sent a Wells notice last month, according to Coinbase, which is a formal notification that the regulator’s staff plans to recommend an enforcement action.
The episode is one of the most recent indicators of rising tensions between the cryptocurrency industry and the SEC, which has declared that many digital assets are securities and are being traded unlawfully outside of its control. The SEC has stepped up efforts to address what it sees as a lack of compliance among intermediaries for crypto firms.
Grewal noted what he perceived as a shift in thinking on the part of SEC Chair Gary Gensler and asserted that “no law or regulation authorizes the SEC to charge Coinbase for the alleged violations in the Wells notice.” We are about to get into a fight that, quite honestly, shouldn’t be happening.
Coinbase filed a petition with a federal court earlier this week to compel the SEC to declare if it will establish new regulations for digital assets. Last year, Coinbase submitted a petition for the creation of such rules.
Katherine Minarik, Coinbase’s deputy general counsel, stated in an interview that the business will concentrate on expanding outside of the United States as needed.
We’re going to do everything we can to press for regulatory clarity in this situation, Minarik said.