Coinbase Receives SEC Wells Notice Regarding Intent to File Suit Over Crypto Offerings
From the desk of Jim Eccleston at Eccleston Law
Coinbase Global announced that it has received a Wells Notice from the Securities and Exchange Commission (SEC) declaring the regulator’s intent to file an enforcement action against the cryptocurrency exchange.
SEC Chairman Gary Gensler repeatedly has taken the position that numerous tokens and products currently offered by cryptocurrency companies constitute securities that must be registered with the regulator. Coinbase announced that the notice implicates certain parts of its exchange as well as the staking service Coinbase Earn and Coinbase Wallet. A Wells Notice provides an opportunity to rebut the SEC’s accusations.
Coinbase announced that its products and services will continue to operate as usual for now, according to Paul Grewal, chief legal officer of Coinbase. Coinbase has maintained the position that its tokens and products do not constitute securities. Coinbase previously received a Wells Notice in 2021 when the SEC warned the company that its proposed “Lend” product, which would have permitted users to earn interest by lending out their cryptocurrency holdings, constituted security. Coinbase subsequently abandoned the launch of its “Lend” product.
Eccleston Law LLC represents financial advisors and investors nationwide in securities, employment, transition, regulatory and disciplinary matters.
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