Coinbase gets notice from SEC over alleged Violation of Security Law
The United States Security and Exchange Commission (US-SEC) has leveled a legal notice (Well’s notice) against Coinbase over allegedly violating the laws of security.
Key Takeaways
- Coinabse received a Well’s notice from US-SEC
- The exchange has allegedly violated the law in its certain staking services like Coinbase Earn.
The biggest American crypto exchange – Coinbase, has landed in the hot water after receiving a Well’s notice from US SEC. SEC has been quite active in the crypto world for some time now. Ripple XRP is already fighting the case against SEC and then they also filed a suit against the entrepreneur Justin Sun. Now it’s Coinbase, the commission sent them a legal notice on March 22, 2023.
Well’s notice is a notification that the staff of the US SEC sends to a company or individual. Its when they are considering enforcement action for possible violations of security laws and regulations.
Coinbase shared on their site the entire situation as they explain that they received ‘Well’s notice’ “regarding an unspecified portion of our listed digital assets, our staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet after a cursory investigation.” Though the commission has yet to clarify the allegations at length.
The SEC filing against the exchange stated,
“the Staff has advised the Company that it made a “preliminary determination” to recommend that the SEC file an enforcement action against the Company alleging violations of the federal securities laws, including the Securities Exchange Act of 1934,”
The CEO of Coinbase Brian Armstrong said that SEC is not fair and reasonable in the demonstration of its engagement with digital assets. In addition, Brian Armstrong also added that
“Coinbase will continue to do what we do best: build the most trusted products and services in order to advance our purpose of updating the financial system, and creating more economic freedom in the world.”
Moreover, the Chief legal officer Paul Grewal also provided the exchange’s stance on the notice in his tweets.
Coinbase is not the only one
Coinbase is not the only one who came under SEC scrutiny recently. In fact, Gemini another American-based crypto exchange previously also got charged for its earn program. The commission has also charged Justin Sun for selling unregistered TRX and BTT tokens.
Moreover, they also charged celebrities for promoting these unregistered securities. In the end, SEC is only cracking down on the individuals and crypto exchanges that it believed have violated security laws.