Coinbase executives discussed their company’s ongoing conflict with the U.S. Securities and Exchange (SEC) in a new video on April 27.
Coinbase does not list securities; situation has not changed
Coinbase Chief Legal Officer Paul Grewal responded to the SEC’s recent Wells notice, stating:
“[The SEC] has reached a preliminary determination that aspects of our company’s core business violate securities laws, so I want to be very direct… Coinbase does not list securities.
He said Coinbase has been “broadly silenced” during its interactions with the SEC, but otherwise described the SEC’s public statements.
Grewal said that in 2021, the SEC seemingly admitted it had no framework or legal authority with which to regulate crypto companies. However, the SEC seemed to take a new stance when FTX collapsed in 2022, to which SEC Chairman Gary Gensler said:
“I feel like we have enough authority – we really do – in this space to regulate crypto companies.”
Grewal suggested that this new statement did not coincide with other changes, such as new legislation from Congress or new regulations at the SEC itself.
He also said the SEC allowed Coinbase to operate as a publicly traded company in 2021. Grewal said his business has not fundamentally changed since then, and as such, the SEC’s actions cannot be motivated by changes at Coinbase or new SEC discoveries.
Coinbase prefers not to go to court
Grewal concluded that Coinbase does not know which of its activities the SEC disagrees with — and while Coinbase is willing to go to court, it would prefer not to.
He said that in order to avoid lawsuits, the SEC must identify which assets are securities or specify which parts of Coinbase’s business must be registered. Coinbase is willing to set up registered securities trading for certain activities if instructed to do so, Grewal said.
Meanwhile, Coinbase CEO Brian Armstrong said his company is “committed to working within the regulatory perimeter” but claimed a message from Wells when there is no clear rulebook is “unconstructive.” Coinbase is prepared to defend this in court, he said.
Coinbase first acknowledged receiving a message from Wells on March 22, saying the message is likely a precursor to SEC charges.
Coinbase filed a lawsuit against the SEC on April 25 in an attempt to force it to respond to its petition. Managers also personally visited the supervisors.
The post Coinbase Suggests SEC Action Is Motivated by Gary Gensler’s Own Views appeared first on CryptoSlate.
