Coinbase Says It’s Ready For Litigation With SEC

Coinbase said it is committed to working with regulators to make the crypto industry “safe and trusted.”

This statement was part of a written submission and video the crypto exchange addressed to the Securities and Exchange Commission (SEC) and shared online Thursday (April 27).

The submissions were delivered in response to a Wells notice Coinbase CEO Brian Armstrong said last month the company received from the SEC, which was tied to Coinbase’s listing of potential unregistered securities across its suite of digital asset products and services.

In the video posted Thursday, in which he addresses the SEC commissioners, Armstrong said Coinbase is committed to working within the regulatory perimeter and wants to see a clear market structure for trading crypto securities.

Related:Coinbase Reaches $100mn Settlement With NY Regulator

He added that not all crypto assets are securities, as there are also crypto commodities, stablecoins and non-fungible tokens (NFTs).

“We’re going to work with multiple regulators to make this industry safe and trusted, and a Wells notice at this stage, when there is not a clear rulebook, is not constructive and it’s not good for America,” Armstrong said in the video. “We are prepared to defend that position in court, but it doesn’t have to come to that. We welcome a true dialogue about a workable path forward for our industry.”

Reached for comment by PYMNTS, an SEC spokesperson said via email: “The SEC generally does not acknowledge the existence or nonexistence of any investigation unless or until charges are filed to, among other reasons, safeguard the integrity of the investigative process and the privacy of witnesses and to avoid damaging the reputation of persons who may not be charged.”

The release of the video comes three days after Coinbase sued the SEC to get clarity on the agency’s approach to crypto regulation.

In a federal court action filed Monday (April 24), the firm asks a judge to compel the SEC to release its response to a petition from last year asking the SEC to “propose and adopt rules to govern the regulation” of digital assets.

In the Thursday video, Coinbase Chief Legal Officer Paul Grewal said Coinbase and the SEC on “on the brink of a fight that doesn’t need to happen.”

“At a time when we could be working together to provide clarity and stability to an important new industry for consumers and investors, not to mention the U.S. economy as a whole, we are instead gearing up for litigation,” Grewal said.