Prepared to Fight Back If Sued

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(No answer Lawsuit threat as a ploy?learn more:

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Major Crypto Exchanges coinbase The US continues its protests against the securities regulator, telling the agency it would be “well-resourced adversary” if sued.

coinbase react for a notice sent last month by US Securities and Exchange Commission ,seconds), which suggested that the agency has an enforcement action in mind.

In response, the exchange said that,

“If the Commission pursues this matter, it will face a well-resourced adversary who will necessarily be motivated to exhaust all avenues.”

Chief Legal Officer Paul Grewal Said Bloomberg said the exchange would still like to avoid the lawsuit, adding that it “did not choose this fight.”

Also in response, the exchange said that Coinbase “never wanted to engage in litigation with the Commission” and that “the Commission should not be suing either.”

(No answer

Coinbase has stood by its claim that none of the tokens listed on its platform are securities, and that the SEC is making no real effort to engage with the industry and provide clear regulatory guidance.

As informed of This week, Coinbase filed a lawsuit with a federal appellate court in Philadelphia, USA, asking the court to compel the SEC to respond to the exchange’s July 2022 petition, which asked for clearer crypto regulation guidelines. I went.

The lawsuit alleged that “the SEC refused to address Coinbase’s rulemaking petition” even as the agency threatened to initiate enforcement proceedings against Coinbase for allegedly listing unregistered securities. expressed intention.

Meanwhile, in a Thursday video, SEC Chairman Gary Gensler reiterated Most digital assets are securities and crypto companies must comply with existing and clear regulations.

Furthermore, he said, crypto companies are performing multiple functions at the same time, including exchanges, brokerages and clearing houses, which “create conflicts of interest that undermine our time-tested investor protections,” Gensler he said.

Related to this, the so-called Wells notice (which is a formal notice from the SEC informing a recipient that the agency plans to take enforcement action against them) given to Coinbase included what the agency called potential securities law violations. as seen. Company, acting as an unregistered exchange, a clearing agency and a broker.

This type of enforcement argued Bloomberg, “could pose a potential threat to Coinbase and its current way of doing business.”

Lawsuit threat as a ploy?

However, the exchange argued in its response to the Wells notice that the SEC could use the threat of litigation to compel the company to register as a National Securities Exchange (NSE) and clearing agency, which, according to Coinbase, it has Not there. Right to do

Coinbase wrote:

“The threat of impending litigation appears to pressure Coinbase into acceding to demands that the Commission simply does not have the authority to order; namely, that Coinbase (i) agree that nearly all digital assets listed on Coinbase’s platform assets are securities; and (ii) overhaul its entire business model to register as an NSE and clearing agency, potentially allowing Coinbase to divest its entire customer-facing business and concentrate on NSE and clearing agencies need to overhaul its public company governance structure in line with the extent of voting controls. Those objectives are supported by law or are within the limits of the Commission’s authority.”

SEC has launched an aggressive crackdown on the crypto industry ftx Fall last year.

So far it has taken action against crypto exchanges bittrex And Geminicrypto lender ProduceAnd many individuals have been accused of manipulating crypto assets, including crypto entrepreneurs. justin sun and infamous Terraform Labs Founder Do Kwon.

Addressing the growing regulatory uncertainty in the US, Coinbase CEO Brian Armstrong even hinted that the exchange may leave the US if regulators do not clarify their approach to the digital asset space.

“Anything is on the table, including relocating or whatever is necessary,” he said. Said During the Innovate Finance Global Summit last week.

Finally, in its response to the notice, Coinbase also argued that, should the SEC take legal action against it, it would put “its practices on trial,” noting that the court had a history of attempts to engage with Coinbase. gain insight into. regulator.

“Since at least 2018, Coinbase staff have repeatedly asked for (and received) Coinbase’s securities law analysis related to its listing process and staking services,” Coinbase said. “The employees never raised any specific concerns about Coinbase’s ongoing provision of these services, which should lead the Court to conclude that the commission’s claims should be stayed on equitable grounds alone.”

The exchange insisted that it was not in the commission’s interest to prosecute Coinbase.