Coinbase receives “Wells Notice” from SEC

Coinbase Global Inc (NASDAQ:COIN) has confirmed that it received a “Wells Notice” from the Staff of the Securities and Exchange Commission (SEC) on March 22, 2023.

The notice states that the Staff has advised Coinbase that it made a “preliminary determination” to recommend that the SEC file an enforcement action against the company alleging violations of the federal securities laws, including the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Securities Act of 1933, as amended (the “Securities Act”).

Based on discussions with the Staff, the company believes these potential enforcement actions would relate to aspects of the company’s spot market, staking service Coinbase Earn, Coinbase Prime and Coinbase Wallet. The potential civil action may seek injunctive relief, disgorgement, and civil penalties.

In its blog, Coinbase said the following:

“We are prepared for this disappointing development. We are confident in the legality of our assets and services, and if needed, we welcome a legal process to provide the clarity we have been advocating for and to demonstrate that the SEC simply has not been fair or reasonable when it comes to its engagement on digital assets.

Rest assured, Coinbase products and services continue to operate as usual – today’s news does not require any changes to our current products or services”.