Coinbase disclosed Wednesday that the company received a Wells Notice from the Securities and Exchange Commission—a document the agency uses to notify companies that they face impending legal action.
The company disclosed that it received this notice in a 10-K filing—a form used by public companies to disclose important news to shareholders—and in a blog post. In the post, Coinbase said the SEC issued the Wells Notice on “aspects of the Company’s exchanges, our staking service Coinbase Earn, and Coinbase Wallet after a cursory investigation.”
The post added that staff had informed the company of potential violations of securities laws but did not provide further details. In the meantime, Coinbase said it does not intend to change how it operates in relation to the announcement, while the Chief Legal Officer suggested that the company would go to court with allegations if necessary.
“If necessary, we welcome a legal process to provide the clarity we advocated and to demonstrate that the SEC has never been fair or reasonable when it comes to its involvement in digital assets. Until then, it’s business as usual,” said Grewal.
A person close to Coinbase, speaking on condition of anonymity because of legal sensitivities, said luck the SEC’s decision to issue the Wells Notice is likely tied to its modest declaration that it is exploring expanding off-shore operations in response to US regulatory pressure.
The person added that the Wells Notice also said that Coinbase listed digital assets that could be viewed as unlicensed securities, but did not specify what those assets were.
This story will be updated with more details soon.