SEC Serves Coinbase in Latest Alleged Crypto Securities Violation

The SEC’s move against Coinbase marked yet another instance of enforcement actions taken against crypto operators


Artwork by Axel Rangel modified by Blockworks


The SEC served Coinbase with a Wells notice Wednesday over concerns about alleged securities violations, according to a filing. 

The Wells notice, which precedes an enforcement action, states that the SEC will be targeting Coinbase’s spot market, staking service, Coinbase Prime and Coinbase Wallet. The agency moves forward with a Wells notice after it has determined laws have been violated through an investigation. 

The exchange in response on Wednesday said it has “produced documents and provided two witnesses for testimony, one on the basic aspects of our staking services and one on the basic operation of our trading platform.” 

The SEC declined to comment, and Coinbase pointed to its public statements and declined to comment further.

“We are confident in the legality of our assets and services, and if needed, we welcome a legal process to provide the clarity we have been advocating for and to demonstrate that the SEC simply has not been fair or reasonable when it comes to its engagement on digital assets,” Coinbase said in its response statement on Wednesday.  

The exchange said it’s “confident in the legality of our assets and services, and if needed, we welcome a legal process to provide the clarity we have been advocating for.”

The SEC “simply has not been fair or reasonable when it comes to its engagement on digital assets,” according to the exchange, which added that the company “provided multiple proposals to the SEC about registration over the course of months, all of which the SEC ultimately refused to respond to.”

The Wells notice, Coinbase said, relates to an “unspecified portion” of its listed digital assets, which the company says are not securities. Even so, exchange representatives said there’s still no clear “regulatory path” toward industry compliance with the “current U.S. crypto regulatory confusion.”

“We spent millions of dollars on legal support to build these proposals and repeatedly asked for the SEC’s feedback,” Coinbase said. “We got none.”

Coinbase has met with the SEC on numerous occasions, claiming to have interacted 30 times in more than nine months — without much to show for it, in the exchange’s estimation.

Loading Tweet..

“Regulatory uncertainty in the crypto industry is getting worse,” Coinbase said. “Instead of developing a regulatory framework for crypto, the SEC is continuing to regulate by enforcement only.”

The publicly traded US company said potential enforcements could incur injunctive relief, disgorgement and civil penalties, per the filing. 

The notice marks the SEC’s second regulatory action against the crypto industry on Thursday. Earlier in the afternoon, the agency charged Tron network’s Justin Sun with alleged securities violations.

Updated March 22, 2023 at 7:15 PM ET: Additional context and quotes throughout.

Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.

Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.

Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.


upcoming event

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. This year’s event will be held in our nation’s capital, where industry leaders, policymakers, and institutional experts will come together to discuss the latest developments and challenges in the ever-evolving world of cryptocurrency. […]

upcoming event

MON - WED, SEPT. 11 - 13, 2023

2022 was a meme.Skeptics danced, believers believed.Eventually, newcomers turned away, drained of liquidity and hope.Now, the tide is shifting and it’s time to rebuild. Permissionless II is the brainchild of Blockworks and Bankless. It’s not just a conference, but a call […]

recent research

Cosmos Hub: ATOM Economic Zone


Replicated Security, the Hub’s Validation-as-a-Service offering that went live in March, is the first step in bringing value accrual to ATOM stakers.



Bitcoin price predictions are meaningless, so let’s expend our prediction energy on something that actually matters


A new complaint against Elon Musk and Tesla alleges that Musk manipulated both bitcoin and dogecoin


Kenya’s central bank doesn’t seem enamored by the idea of a CBDC but hasn’t slammed the door shut yet


Both Ethereum and Solana have enjoyed vibrant DeFi environments, but this has not yet been the case for Cosmos


As Japan takes important step forward on stablecoins, industry participants say, proposed US laws around such crypto assets remain in flux


Stablecoins offer global financial access and on-chain transactions without limitations, while FedNow falls short in terms of utility, global reach and inclusivity