Ripple CTO furious at SEC threat to Coinbase

Ripple CEO David Schwartz takes to Twitter to criticize the way the US Securities and Exchange Commission (SEC) is currently dealing with the crypto industry. In his post, Schwartz suggests that he is wavering between simple incompetence on the part of the authorities or whether they are trying to protect insiders and early investors. Ripple’s CTO responds to the so-called Well’s notice that Coinbase received from the SEC.

What is a Wells notice?

A Wells notice is a notice issued by the SEC to inform an individual or organization that they are under investigation and that the SEC is considering prosecuting them.

This form of notice is named after John Wells, a former SEC employee who was involved in developing the process. The Wells notice is intended to inform the suspected party of the nature of the investigation and thereby give it the opportunity to prepare.

When the SEC issues a Wells notice, it is not yet certain that prosecution will take place, but it is an indication that the financial watchdog is considering it. So it seems that Coinbase should be concerned about a possible SEC prosecution.

Surprise at Coinbase

Coinbase CEO Brian Armstrong previously shared that his exchange platform had received the Wells notice for listing specific assets and their staking program. Armstrong is surprised by this, because the SEC audited the entire company even before the company’s IPO two years ago.

According to Armstrong, an official Coinbase document related to that check contains 57 references to strikes. In that regard, it is of course extra strange that the SEC is now suddenly coming back to tell Coinbase that there are certain things that are not right with their staking program.

All told, the potential battle between Coinbase and the SEC promises to be a very interesting one, as Coinbase has plenty of ammunition to defend itself. Armstrong further shares in his tweets that Coinbase plans to make all of its communications and potential legal battle with the SEC public for all to judge.

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