Shulou(Shulou.com)11/24 Report--

On the morning of March 23, Beijing time, the Securities and Exchange Commission (SEC) issued a notice to the cryptocurrency exchange Coinbase on Wednesday, warning that the company may violate US securities laws. Coinbase shares fell nearly 12% in after-hours trading on Wednesday on the news.

"based on discussions with regulators, the company believes that these possible enforcement actions will involve businesses such as the spot market, Coinbase Earn, Coinbase Prime and Coinbase Wallet," Coinbase said in a regulatory filing. Potential civil lawsuits may seek injunctive relief, return of funds, and civil penalties. "

SEC is stepping up enforcement against the cryptocurrency industry to crack down on companies and projects that peddle unregistered securities. It was first reported in mid-2022 that SEC was investigating Coinbase.

A few months before the collapse of the cryptocurrency exchange FTX in November, the cryptocurrency market was hit by rising dollar interest rates and investors exiting risky assets. This led to the collapse of the stable currency Terra and the collapse of the cryptocurrency hedge fund Three Arrows Capital and the exchanges Celsius and Voyager.

Such a notification by the SEC is usually one of the last steps before a formal complaint is filed. The notice usually sets out the framework of SEC regulatory views and logic, and provides potential defendants with the opportunity to respond to SEC's views.

Coinbase said the investigation was "sketchy" and that the notice did not provide much information about possible violations.

"although we will not take this issue lightly, we are very confident in the way our business is run," Paul Grewal, Coinbase's chief legal officer, said on his official blog. "compared with what we showed to SEC when we became a public company in 2021, our business has not changed."

Coinbase said its cryptocurrency exchange would continue to operate until it was resolved through legal procedures.

Coinbase executives, including founder and CEO Brian Armstrong (Brian Armstrong), are already refuting what SEC considers excessive. Since the FTX crash, SEC has been keeping a close eye on the cryptocurrency industry. Under the direction of SEC Chairman Gary Gary Gensler, SEC has taken enforcement actions against a number of heavyweights and institutions, including Gemini, Genesis, Sun Yuchen, Quan Dao Heng and the cryptocurrency exchange Kraken.

"We are prepared for this disappointing outcome and have full confidence in the legitimacy of our assets and services," Greval said in a statement. "if necessary, we welcome legal procedures to provide the transparency we have been advocating and to prove that SEC's participation in digital assets is unfair or unreasonable."

SEC sent the same notice to stable currency issuer Paxos in February. "We will contact SEC staff on this issue and actively prepare litigation if necessary," a Paxos spokesman said at the time.

Greval, for his part, said Coinbase wanted to seek better regulatory transparency. "tell us the rules and we will follow them," he said. "give us the specific registration path, and then we will register the part of our business that needs to be registered."

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