- Top management and exchange lawyers responded to Wells’ notice
- They say the SEC has no reason to investigate
At the end of March, the Securities and Exchange Commission (SEC) sent a so-called “Wells Notice” to Coinbase. More than a month later, the exchange prepared an official response in which it threatened the regulator with “unpleasant consequences” if it continues to put pressure on the company.
“Notifying Wells at this stage, when there is no clear set of rules, is not constructive and will only hurt America. We are ready to defend this position in court, but we do not want to bring it to that. We welcome a constructive dialogue on the real path of development of the industry” — declared Exchange CEO Brian Armstrong and General Counsel Paul Grewal.
The video at the link above was posted yesterday, April 27th. Around the same time, Grewal spoke at Consensus 2023, where he stated the following:
“We are literally sitting here on the stage asking for regulation, clear rules, a structure that makes sense directly to our industry so that we can register.”
Coinbase’s official response to the “chain letter” from the SEC is set out in a 73-page note of protest. The essence of this appeal can be summarized in one thesis, set out by the lawyers of Sullivan & Cromwell:
“The SEC case against Coinbase will fail both in fact and in accordance with the letter of the law”
Grewal noted that the regulator has no and cannot have claims to the exchange’s operations. Allegedly, the platform has never traded securities, but would like to add this position in a favorable regulatory environment.
Also note that Coinbase filed a counterclaim against the SEC. The company demands to oblige the regulator to consider its petition on the legitimacy of rulemaking in the field of crypto assets.