Coinbase Global Inc. COIN takes steps to prevent the SEC from filing a lawsuit against the company and highlights the challenges the agency could face in such litigation.

In a detailed Answer to the SEC’s March Wells Notice, which pointed this out Intention of the regulator to initiate enforcement actionCoinbase warned that it would be “a well-armed opponent who will inevitably be motivated to capitalize on any opportunities.”

That’s what the company’s chief legal officer said Paul Grewal stated Coinbase would prefer to avoid a lawsuit altogether.

The SEC, led by the Chairman Gary Genslerthat most digital assets are consistently maintained and that crypto firms must comply with existing regulations.

Gensler also expressed concern about crypto exchanges that serve multiple roles, e.g. B. as exchanges, brokers and clearing agencies, which he believed created conflicts of interest.

Coinbase argued that none of the tokens it lists are securities and that the SEC should create new regulations to clarify how securities laws apply to digital assets.

The SEC’s Wells Notice, which identified potential securities law violations by Coinbase, heightened tensions between the two parties.

Also read: Regulation Rumble: Unwrapping the Coinbase SEC Showdown and What It Means for Crypto

Coinbase faces significant risks if the SEC takes enforcement action against it.

In an attempt to forestall a lawsuit, Coinbase filed a lawsuit earlier this weekto ask a court to compel the SEC to respond to a rulemaking petition filed last year.

The SEC can still continue its enforcement actions.

In response to Wells’ notice, Coinbase warned that such a lawsuit would expose the SEC’s practices to scrutiny, including its alleged refusal to allow Coinbase to register using an alternative trading system license.

The company accused the SEC of pressuring the SEC to register as a national securities exchange and clearing house with threats of legal action, which…

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