Following the recent crisis in the crypto industry and also in the banking industry, the Securities and Exchange Commission (SEC) is extra cautious about all firms that work in the industry in order to avoid a potential crisis in the future that can affect the investments of the people.
Currently, the organization has been keeping a close watch on all of the major crypto exchange firms in the country, and Coinbase Global Inc., which is the biggest crypto exchange firm in the country, is the prime member of the list.
In one of the reasons statements made by the officials of the company, they made it clear that the Securities and Exchange Commission had been pressuring the company to overhaul all major operations with their customers.
The statement by Coinbase Global Inc., was made on Thursday, and the response from the part of the company was in regards to a Wells Notice that was received by the company last month.
Named after the former SEC advisory committee chair John A. Wells, a Wells Notice is used by the Securities and Exchange Commission as a means to alert a company regarding any kind of alleged violations that takes place at the firm.
According to the officials at Coinbase Global Inc., the Well Notice received by the company stated that the Commission could tackle legal; action against the company on grounds of violating the securities law.
The Securities and Exchange Commission is very strong in stating that the token and other products offered by the company are securities that should be registered. But Coinbase Global Inc. does not agree with this argument. The company countered this claim by saying that none of the products offered by the company now are securities.
The CEO of Coinbase Global Inc. Brian Amstrong made a statement regarding the Well Notice that the company received from the Securities and Exchange Commission, saying that receiving a Wells notice from the SEC at a time when there is not even a clear rulebook is not constructive and that it is something that is not good for the country too.
The statement regarding the notice was made by Amsstriong in a video. He also added that the company was ready and equipped to defend its position in the court but he ended by saying that the situation doesn’t have to come to that.
Coinbase also stated that the SEC has not uncovered any new information about the company and they also added that if there was any concern regarding the operations of the company then it should have been brought up when the company filed its public offering process.
According to the Chief Legal Officer of Coinbase Global Inc. Paul Grewal, the company had been talking to the Commission for years. He says that the company has asked the SEC for their view on how the securities law might apply to the company and its related operations and that the reply they got for their queries from the SEC was nothing but just silence.
It should be noted that the SEC could sue Coinbase based on the Wells Notice. The company is also aware of this fact and they have stated that they are prepared to defend themselves. Also, a lawsuit that involves the company and regulator may not be the best thing for the commission.
The Chief Legal Officer of the company made it clear that Coinbase does not have any interest in litigation with the SEC.
They also added that it is in the best interest of the Commission too, as the trial can affect the reputation and trust that the agency has built over decades, and entering litigation means putting their own actions on trial.
A possible lawsuit can also mean an elevated risk to broad aspects of the enforcement programs from the Commission too, says the company.
With the recent developments in the field of crypto and banking, the SEC has increased the scrutiny in the field of the crypto industry more than before.
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Earlier, the field was much free of all kinds of regulations and in light of recent events in the industry, the SEC is convinced to make more restrictions and laws in the field, which is not in the best interest of the companies operating in the field.
The Commission has also faced different oppositions for trying to impose more regulations in the field from both crypto firearms and also crypto enthusiasts.
As a result of the regulation from the Securities and Exchange Commission, companies like Brittex have closed down all their operations in the United States.
Companies like Coinbase Global Inc, which is currently the largest crypto exchange firm in the country argue that more regulations in the field will affect the operations and also will discourage the participation of people and that all these can have an effect on the growth of the country too.
In one of their statements, Coinbase Global Inc also made it clear that the company will be shifting its operations overseas from the United States if there is no clarity regarding the laws and regulations concerning crypto trade.
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