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Coinbase Issued Wells Notice by SEC

Reuters | March 22, 2023

Wells notice coinbase - Coinbase Issued Wells Notice by SEC

The U.S. Securities and Exchange Commission (SEC) has threatened to sue Coinbase Global Inc over some of the crypto exchange's products, turning up the heat on the largely unregulated sector.

  • The potential enforcement actions would be tied to aspects of Coinbase's spot market as well as its Earn, Prime and Wallet products, the company said.
  • Shares of Coinbase dropped nearly 13% to $67.33 in extended trading after the company said on Wednesday that the regulator had issued it a Wells notice - a formal declaration that SEC staff intend to recommend an enforcement action.
  • Coinbase said its services continued to operate as usual after the notice was issued.

See:  Coinbase Begins ‘Wallet as a Service’ Enabling Companies to Integrate Into Their Own Apps

  • A Wells notice does not always result in charges or signal that the recipient has violated any law.  A Wells notice is typically one of the final steps before the SEC formally issues charges. It generally lays out the framework of the regulatory argument and offers the potentially accused an opportunity to rebut the SEC’s claims.

Coinbase Chief Legal Officer Paul Grewal said in a blog post:

Although we don’t take this development lightly, we are very confident in the way we run our business – the same business we presented to the SEC in order for us to become a public company in 2021.

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NCFA Jan 2018 resize - Coinbase Issued Wells Notice by SECThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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