Coinbase Sues SEC Over Lack of Transparency
Since Coinbase received a Wells Notice from the SEC in March 2023, the company has been noticeably irked by the Securities and Exchange Commission as it continues to hurl lawsuits at any and all web3 businesses within the United States without clarifying what laws are being broken.
The lack of transparency has become a major problem for Coinbase as they’ve routinely followed every legal step necessary to remain operational within the U.S. as a publicly traded company. Due to this, Coinbase has responded by filing a narrow action against the SEC for failing to respond to attempts from Coinbase for further clarity concerning U.S. financial laws.
The lawsuit
The lawsuit in question demands that the SEC respond with a Yes or No response to a petition that Coinbase made in July 2022. Their frustration stems from the fact that the SEC has been overly eager to throw lawsuits at Coinbase and other crypto companies without identifying what laws have been broken.
More so, the company believes that the SEC is enforcing laws that simply don’t exist or have not been made public yet, harming the web3 industry in the United States and preventing American businesses from innovating cryptocurrencies and blockchain technology.
Why Coinbase is suing
Coinbase has made it clear that they believe cryptocurrencies and web3 both have the power to improve financial opportunities for people all around the world and while they’ve played by the SEC’s rules, they’ve been unable to focus on their mission because the SEC is carelessly hurling lawsuits against them.
Coinbase also stated that they’ve been in close communications with the SEC since their inception and that they remain willing and open to all discourse and dialogue with regulators. Compared to many other businesses, Coinbase is more than willing to discuss how cryptocurrencies need to be enforced and have proposed many different solutions that the SEC has ignored before sending them a Wells Notice.
Experience with the SEC in the past
One of the largest frustrations for Coinbase has been that they are a publicly-traded company and followed every rule and regulation required by the SEC which the company has mentioned many times.
From Coinbase’s perspective, it is bizarre that the SEC has decided to enforce unknown laws on the company because they’ve created a business model that follows every law since they’ve gone public, yet problems are still continuing.
Is web3 going to exist in America?
The biggest issue though can’t be taken lightly: Coinbase is willing to leave the United States. This could be a huge problem for the future of the web3 industry as Coinbase represents the most thorough, secure, and trusted cryptocurrency company in the United States, unlike Binance which avoids the country for legal reasons.
If the SEC continues their seemingly random attack on American web3 businesses, a brain drain will begin to set in and innovation within the United States will slow down in an industry that moves incredibly fast.
While Coinbase might not be everyone’s preferred crypto exchange, they are, without question, the most responsible company when compared to contemporaries like FTX. Their absence in the United States could lead to larger problems in the future as more blockchain experts pursue safer careers in competing countries.
