Key Takeaways:
- Coinbase is gearing up to go on a legal battle with the Securities and Exchange Commission (SEC) over how federal securities rules apply to the crypto business.
- The SEC has targeted Coinbase in particular, issuing the firm a Wells notification earlier this month, which is a notification alerting of its plan to sue the company.
According to reports, Coinbase is getting ready for a protracted legal battle with the Securities and Exchange Commission. Although the company officially still has nothing to contend with as it merely obtained a generic Wells notice from the authority, it will probably eventually be required to defend its long-standing argument that it does not and has never listed securities.
Coinbase has searched for a new prospective headquarters somewhere in reaction to these events. Armstrong claimed he is already in contact with UK officials to make the country a Web3 hub in an interview with CNBC. The UK is currently the second-highest revenue-generating country for the exchange notwithstanding legal challenges in the US.
Although going to court is not the preferable conclusion, Armstrong told CNBC that Coinbase could need to do so in order to get the clarification it needs. The SEC’s lack of clarity for businesses in the cryptocurrency sector was another issue that the CEO criticised, charging the regulator with “abdication of responsibility” and failing to release a detailed market rulebook.
The Wells notice’s issuance was described as “unfortunate” by Coinbase CEO Brian Armstrong, who also claimed that his company was unaware of the SEC’s specific concerns.
In remarks made at a fintech conference in London, CEO Brian Armstrong also noted that although the U.S. has the potential to be a significant market for cryptocurrencies, at the moment we are not yet seeing the necessary regulatory certainty.
“I believe if we don’t see that regulatory clarity emerge in the U.S. in a number of years, we may have to think about investing more elsewhere in the world… Anything is possible, even moving or doing whatever else is required.”
Regulation is still a constant battle, but Coinbase has started to create other businesses than cryptocurrencies. Armstrong also covered the applications of decentralised social media and decentralised identification.
Armstrong once more emphasised that Coinbase received the Wells notice after more than 30 ineffective meetings with the SEC while also discussing the upcoming court dispute. The SEC and cryptocurrency companies have been in a long-running back-and-forth where the regulator repeatedly invites the companies to open dialogue while the companies maintain that the SEC consistently fails to react even to the most basic questions.
