News of the US Securities and Exchange Commission’s action against Coinbase, the number one cryptocurrency exchange in the United States, spread like wildfire in the crypto community, sparking an existential debate about what cryptocurrency means in the United States.
“It should be clear by now that the Biden administration wants all crypto—even its legitimate parts—out of the US,” He tweeted that Caitlin Long is the founder and CEO of Custodia Bank. See also yesterday’s White House economic report, which divested into all financial innovation while supporting the “stability” of traditional banks.”
Long and others questioned the SEC’s sudden delivery of a so-called “Wells notice” that threatened to sue Coinbase over claims it offered unregistered securities after allowing the publicly traded company to issue staking rewards for years.
“For the past 9 months, [Coinbase] We met with the SEC more than 30 times and shared details of our business to pave the way for registration. wrote Paul Grewal, Chief Legal Officer at Coinbase. “At this time, the SEC has provided essentially 0 comments on what to change, or how to file. Instead, we got a Wells notice today.
A Wells Notice is the SEC’s announcement that it intends to take enforcement action against a company.
“Since day one, @coinbase has invested heavily in fully complying with US laws, even if it means losing competitiveness against other exchanges that choose to move slowly or take shortcuts” wrote Chris Dixon, Andreessen Horowitz General Partner.
“The United States has a strong history of fostering innovation, and regulators have played an important role by establishing clear rules and going after bad actors,” Dixon continued. “We believe the United States will take a more constructive approach to cooperating with innovators while protecting consumers.”
Many expressed solidarity with Coinbase, with Cinneamhain Ventures (CEHV) founder Adam Cochran saying he would “vote with my wallet and become a customer” if Coinbase fights the agency.
While many were quick to call out the SEC, some took the opportunity to criticize the company, including many in the XRP community who are still reeling from Coinbase’s delisting of XRP from its wallet last fall.
Ripple Labs has been in a court battle with the SEC since December 2020, accusing the company that its founders launched XRP in June 2012 of misleading investors and raising $1.3 billion in unregistered securities.
“I doubt I’ll ever understand how the SEC signs off on publicly listed @coinbase and then raises all these issues” He tweeted that Attorney Bill Morgan. “Forget only crypto, how is the SEC protecting Coinbase’s shareholders with this appalling behavior?”