Coinbase Offers a Fiery Response To SEC's Threat of Enforcement Action

Crypto exchange Coinbase offered a fiery response on Thursday to last month's Wells notice from the SEC, telling the federal regulator that an enforcement action against the crypto exchange would pose "major programmatic risks" to the SEC that would "fail on the merits." From a report: "Coinbase does not list, clear, or effect trading in securities," the company's response said. The analysis SEC did staffers to justify an enforcement action "appears to rest on superficial and incorrect analogies to products and services offered by others," Coinbase wrote in a blog post from chief legal officer Paul Grewal. Separately, Grewal told CNBC, "At the time when we went public we had detailed discussions with the SEC about the very aspects of our business that are now -- two years later -- the subject of the Wells notice. Nothing has changed." The SEC indicated to Coinbase in a March wells notice that its spot trading, staking, custody and institutional trading businesses were at risk. The SEC's warning to Coinbase noted that the regulator would allege Coinbase was offering and selling unregistered securities, in violation of federal law. The SEC has used unregistered offering and sale violations to force other crypto exchanges to close services in the U.S., including the crypto exchange Kraken's staking-as-a-service product.

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