Coinbase responds to SEC allegations with new video

If you follow the crypto world a bit, you’ve probably heard of the Security and Exchange Commission (SEC). The American financial watchdog makes many crypto proponents’ hair stand on end. The SEC and its chairman Gary Gensler have been extremely hostile to the crypto sector in recent months. Executives of the crypto exchange Coinbase have explanation given about their troubled relationship with the SEC.

SEC avoids any dialogue

Coinbase recently received an official accusation, also known as a ‘Wells notice’, from the SEC. The exchange platform would violate several so-called securities laws. Coinbase, in turn, blames the SEC for very poor cooperation and a total lack of feedback and guidance for crypto companies.

On April 27, Coinbase executives explained their conflict with the SEC in a video. This was also the response to the primary allegation that Coinbase facilitated the trading of securities.

“(The SEC) has provisionally concluded that aspects of our business violate securities laws. So I want to be very clear: Coinbase does not list securities.”

It was also mentioned that the SEC avoids any constructive dialogue. For example, Coinbase repeatedly received silence in response to questions. According to Coinbase, the exchange received SEC approval in 2021 for an official IPO. In other words: at the time, Coinbase had everything in order according to the SEC.

Coinbase has not undergone any fundamental changes since then. So the new criticism from the SEC seems completely out of the blue. Coinbase’s biggest frustration is the aforementioned lack of dialogue and feedback from the SEC.

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Coinbase demands clarification

According to exchange executives, Coinbase is willing to apply for certain licenses or registrations if required by the SEC. Coinbase is “ready to proceed as per guidelines,” CEO Brian Armstrong said. But an official accusation, which is most likely a precursor to an indictment, without clear feedback and guidance from the SEC is “totally unconstructive.”

In a desperate attempt for clarification, Coinbase sent a simple petition to the SEC with multiple “yes” and “no” questions. For now, the SEC refuses to complete this questionnaire. On April 25, Coinbase counterattacked and took the SEC to court. The exchange wants to force the SEC to complete the questionnaire in this way.

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