The recent Wells notice from the SEC to Coinbase has sparked another reaction from Ripple. In a recent tweet, Ripple’s CTO, David Schwartz, criticized the US Securities and Exchanges Commission for not clarifying cryptocurrency regulatory guidelines before attacking crypto firms.
Schwartz’s comment was in response to Paul Grewal, chief legal officer to Coinbase’s statement asking the SEC to provide rules for crypto in the United States. The Wells Notice comes amid several enforcement actions by the SEC on crypto firms alleging unregistered securities offerings.
Ripple And Coinbase Challenge Seek SEC To Provide Clear Guidelines For Crypto
Coinbase recently received a Wells notice from the SEC alleging the exchange’s staking services offer unregistered securities. As a formal notification, the Wells Notice suggests the regulator is availing Coinbase an opportunity to respond to its allegation before deciding to take legal action.
However, through its chief legal officer, Coinbase complained about the SEC not giving them room and guidelines when they sought to register their business operations. The exchange also noted that the watchdog did not provide ample information in the notice to respond.
Meanwhile, Coinbase frequently affirmed that no asset listed on its platform or staking services is security. Following Grewal’s statements in a recent blog post, Coinbase appears ready to face the SEC to defend its case.
While the controversy around this case continues to escalate, Ripple’s chief legal officer Stuart Alderoty released a comment via a tweet yesterday. The lawyer quoted an old saying “the enemy of my enemy is my friend.” This statement somehow implies that Alderoty might be throwing in weight for Coinbase.
The Ripple CTO Schwartz’s comments come after Paul Grewal called out the SEC to provide reasonable rules for crypto, noting that Coinbase is willing to follow. Grewal thinks the SEC has been unreasonable in their moves on crypto assets, noting that legislation will serve better in defining crypto regulations than enforcement actions.
However, the recent Wells notice has not frailed Coinbase’s operations. The exchange affirmed that its activities would continue as usual while it works to clarify things with the SEC. Coinbase noted that it is open to any opportunity to get crypto regulatory transparency in court.
SEC’s Views On Cryptos As Securities Appear Lacking
Coinbase maintains that its staking services are legal and no assets listed on its platform are security. According to Grewal, the crypto exchange has repeatedly engaged with SEC officials to get clear regulatory guidelines for its services. Coinbase affirmed its stance on the SEC by citing a ruling against the SEC by federal bankruptcy judge Michael Wiles in the recent Voyager case.
The judge’s findings in the cases make it clear that the SEC’s views on crypto as a security lacks clear facts, Grewal noted.
According to the lawyer, Judge Wiles’ ruling stated that the regulators have not agreed on whether cryptocurrencies are commodities subject to the CFTC oversight or securities under securities laws. These statements further buttress David Schwartz and Coinbase’s criticism of the SEC.
Featured image from Voi and chart from Tradingview.com
