U.S. cryptocurrency exchange Coinbase is preparing to file a lawsuit with the U.S. Securities and Exchange Commission after regulators warned the company could violate securities laws, CEO Brian Armstrong told CNBC on April 18. (SEC) in a protracted legal battle.
Coinbase received Wells’ notice from the SEC on March 22, indicating possible enforcement action. Notification is usually the last step before regulators can file charges. In response, Armstrong expressed disappointment and revealed that the company has not received any clear details from the SEC about the alleged violations. He told CNBC: “We met with them over 30 times in the last year. Never got any feedback from them about what we could do better or differently, and then this Wells notice came. I don’t think we’ll end up having to Not going to court to get the clarity we need and develop case law."
Armstrong said his company was prepared to fight a protracted fight with the SEC if necessary. Armstrong explained to CNBC that while litigation is not the preferred outcome, Coinbase may need to go to court to gain the clarity it needs. The CEO also criticized the SEC for its lack of clarity on companies in the cryptocurrency industry, accusing the regulator of "passing the buck" and failing to issue a clear rulebook for the market.
At a fintech event in London on April 18, Armstrong revealed that Coinbase may consider moving out of the United States due to regulatory uncertainty. He mentioned that the company is currently looking at other markets, with the UK a priority due to its efforts to position itself as a cryptocurrency hub. On April 17, the SEC charged crypto asset trading platform Bittrex and its co-founder and former CEO William Shihara with operating an unregistered national securities exchange, broker-dealer and clearinghouse. The regulator also filed separate charges against Bittrex Global.
John Reed Stark, former director of the SEC's Office of Internet Enforcement, shared on Twitter that he thinks "Coinbase is next," given the SEC's recent charges against Bittrex.
