The executives at Coinbase recently spoke out in Youtube about the firm’s regulatory issues in response to the Wells Notice issued by the SEC. Coinbase receiving such a notice suggests that the US regulator may try to carry out enforcement actions against the crypto exchange. In a video addressed to the chair and the commissioners of the SEC, the Chief Legal Officer, Paul Grewal, highlighted how the core commitment to regulatory compliance has never wavered.
In the video, Grewal highlighted how the business of Coinbase did not change a bit in the last two years since it was approved for listing on the Nasdaq stock exchange. He also mentioned that the SEC lacks statutory authority to regulate an enterprise like Coinbase.
Coinbase has already been regulated, and it is the New York state BitLicense that prevents the firm from listing securities. Grewal added,
“We believe that legislation or rulemaking is needed if the SEC wants to expand its oversight over our industry”
The SEC previously asked Coinbase to develop a proposal on behalf of all crypto companies if they seek to list securities. Similarly, the regulator dropped all discussions prior to responding to the proposals by Coinbase. Furthermore, Brian Armstrong reassured that Coinbase is more than willing to go to court to defend its position. However, the firm is open to any developments leading to a path forward for the crypto industry.
Gary Gensler Takes Another Dig at Crypto
In other news, Gary Gensler has taken another swipe at crypto by mentioning how a number of crypto exchanges are violating securities law. Gensler recently shared a video of himself in twitter where he mentioned how crypto assets are investment contracts, and how they must be registered with the SEC to protect investors.
Gensler stated,
“Crypto markets suffer from a lack of regulatory compliance. It’s not a lack of regulatory clarity. The law is clear, if you’re a securities exchange, clearinghouse, broker or dealer, you must come into compliance, and register with us”
Intermediaries for investment contracts are required to comply with securities laws & register with @SECGov.
Instead, many crypto platforms are contending that their investment contracts are something else.
The law cares about what something actually is, not what you call it.
— Gary Gensler (@GaryGensler) April 27, 2023
The SEC has been at the forefront of the major crackdown against several crypto exchanges and firms. The authority has repeatedly stated that all digital assets, except Bitcoin, are securities. Just earlier this month, Gensler was grilled by the members of Congress amid increased criticism regarding his leadership.
The masses believe that the SEC’s approach towards regulation, apart from his leadership, is simply regulation by enforcement. Many users criticized Gensler in reply to his tweet, as they asked to defund the SEC.
