Crypto glossary
Wells notice
A Wells notice is a letter from US SEC staff telling a company or person that they plan to recommend an enforcement action against them.
The name comes from the Wells Committee, an SEC advisory group whose 1972 report recommended giving potential defendants a chance to respond before charges. After an investigation, the SEC's enforcement staff send the notice to describe the violations they intend to recommend. The recipient can reply with a Wells submission, a written argument explaining why no action should be taken, before the commissioners vote on whether to sue.
A Wells notice is not a charge or a finding of wrongdoing, and some never lead to a case. But it is a serious step, and listed companies often disclose it because it is material to investors. In crypto, several large exchanges, trading apps, NFT marketplaces and DeFi developers announced Wells notices between 2023 and 2024, often followed by public statements contesting the SEC's view that tokens they handled were securities.
After the SEC's change of approach in 2025, a number of crypto investigations that had reached the Wells stage were closed without charges.
Example
A US crypto exchange discloses in its quarterly report that it has received a Wells notice over its staking product. It files a Wells submission arguing that staking is not an investment contract.