Coinbase rejects US regulator’s allegation that it violated crypto rules

NEW YORK/WASHINGTON, April 27 (Reuters) – Coinbase Global ( COIN.O ) has reiterated its view to the U.S. Securities and Exchange Commission that it has not violated any securities laws in its formal response to a legal threat received from the regulator, the firm said Thursday.

Coinbase CEO Brian Armstrong and Chief Legal Officer Paul Grewal said the crypto exchange would like to list securities in the future, but would not feel comfortable given the regulatory uncertainty, in a response to the SEC released on Thursday.

“Coinbase does not list securities,” Grewal said.

Last month, Coinbase said the SEC sent it a Wells notice — a formal statement that the regulator’s staff intends to recommend an enforcement action.

An SEC spokesperson declined to comment, noting that the agency does not acknowledge the existence or non-existence of investigations.

The incident is among the latest signs of escalating tensions between the crypto sector and the SEC, which has taken the position that many digital assets are securities and operate illegally outside their oversight. The SEC has increasingly sought to tackle what it considers a lack of compliance among crypto firm intermediaries

“No law or regulation authorizes the SEC to charge Coinbase with the alleged violations in the Wells notice,” said Coinbase’s Grewal, noting what he perceives as a change in the SEC chair’s views. “We’re on the brink of a fight that doesn’t need to happen, and frankly shouldn’t happen.”

As SEC head, Gensler has argued that the “wild west” of crypto should be more actively regulated, and that firms dealing in digital securities must register with the agency.

Coinbase has appealed to a federal court to force the SEC to say whether it will create new rules for digital assets.

The firm’s vice president, Katherine Minarik, said in an interview that Coinbase will focus on growing outside the United States as needed.

“We’re going to leave no stone unturned to push for regulatory clarity here,” Minarik said.

Reporting by Chris Prentice; Editing by Leslie Adler

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