Brian Armstrong, the chief executive officer of American crypto exchange Coinbase, and the company’s chief legal officer, Paul Grewal, have responded to a Wells Notice issued by the U.S. Securities and Exchange Commission (SEC) weeks ago in preparation for enforcement action.
In a recent YouTube video, the Coinbase executives insisted that the SEC’s notice was unnecessary. The U.S. government has yet to develop clear rules for the crypto industry, and the exchange’s commitment to regulatory compliance has not wavered.
Recall that the SEC issued a notice against Coinbase on March 22 after a series of investigations, claiming that the platform offered unregistered securities. While announcing the development on Twitter that same day, Armstrong and Grewal expressed their disappointment at the agency for choosing a legal battle over constructive dialogue, which the exchange had been gunning for in previous years.
As of then, the executives said Coinbase was compliant with securities laws in its asset listings and staking services. They have maintained the same stance and reiterated their views yesterday in the video.
“We are committed to working within the regulatory perimeter, and we want to see a clear market structure for trading crypto securities. Not all crypto assets are securities. There are also crypto commodities, there are stablecoins, there’s crypto that’s artwork. We’re going to work with multiple regulators to make this industry safe and trusted,” Armstrong said.
Furthermore, the CEO argued that issuing a Wells Notice at this stage, when America does not have a clear rule book for the crypto industry, is unconstructive and bad. He added that while Coinbase is prepared to defend its position in court, it did not have to come to that, as the exchange is ready for “true dialogue” with regulators about a path forward for the industry.
Almost the same time the video was posted, Grewal was seated on stage talking to an audience in Austin, Texas, at Consensus 2023, a crypto event hosted by CoinDesk. The legal officer reiterated his thoughts on the matter.
Alongside Armstrong, Grewal insisted that Coinbase did not list securities due to its robust process based on the SEC’s guidance. He disclosed that the exchange rejects about 90% of the assets reviewed for listing.