Key Takeaways:
- Coinbase gets a Wells notice from SEC, meaning a lawsuit can be around the corner.
- The exchange worked with the regulators before the notice, thus finding SEC’s actions “unfair.”
- Cathy Wood’s pro-crypto ARK Invest dumps a part of its COIN holdings.
YEREVAN (CoinChapter.com) – Coinbase, the largest crypto exchange in the US, got a Wells notice from the Securities and Exchange Commission (SEC), according to the announcement on March 22. After a cursory investigation, the regulator took issue with the staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet.
SEC is Unfair — Coinbase CEO
In short, a Wells notice is how the SEC warns a company that the latter is under recommendation for enforcement action after possible violations of securities laws. It is not a formal charge or lawsuit but can lead to one.
Meanwhile, the exchange has repeatedly expressed its readiness to work with the SEC and declare all the necessary information.
Moreover, Coinbase chief executive Brian Armstrong asserted that digital assets listed on the exchange went through a “rigorous” review and added that “the SEC simply has not been fair or reasonable when it comes to its engagement on digital assets.”
Our S1 clearly explained our asset listing process and included 57 references to staking. Coinbase runs a rigorous asset review process and has rejected more than 90% of assets that have applied to be listed on the platform.
noted Armstrong in a recent tweet.
Most importantly, Armstrong also asserted that in 2021 the SEC reviewed their business model and “approved Coinbase to go public.”
While we understand that this is all part of the journey to reforming our financial system, we are right on the law, confident in the facts, and welcome the opportunity for Coinbase (and by extension the broader crypto community) to get before a court.
he said.
Also read: SEC vs. CFTC — who will regulate crypto markets?
Cathie Wood Dumps Coinbase Stock
The Wells notice aligns with the SEC’s crypto witchhunt, which Chair Gary Gensler declared in 2022.
However, it doesn’t explain why ARK Invest, an investment firm with roughly $14 billion of assets under management, dumped its Coinbase stock (COIN) stash right before the exchange received the Wells notice.
Also read: 3 Key Takeaways From Jerome Powell’s Speech After Interest Rate Hike.
It is not public whether ARK chief Cathie Wood knew or suspected the upcoming notice. However, she sold roughly 161,000 COIN shares on March 21, which accounts for just over 9% of all Coinbase stock.
Earlier this year, ARK acquired a fresh batch of COIN, bringing its total ownership to 9.9 million shares of the crypto exchange worth nearly $575 million before the Tuesday dump.
As a result of the regulatory turmoil, the COIN stock saw a 10% intraday loss on March 22 and stood at $77 per share ahead of the March 23 Nasdaq opening bell.
