The Securities and Exchange Commission’s (SEC) Wells notice to Coinbase COIN has sent ripples across the cryptocurrency industry, with experts expressing concerns over the regulator’s approach to regulating the market.
The SEC alleges several violations and highlighted the potential consequences of the ongoing debate about classifying cryptocurrencies as securities, emphasizing Coinbase’s history of compliance with regulatory requirements.
The experts called for a cooperative stance between Coinbase and regulators, urging the establishment of a clear legal framework around cryptocurrency in the United States in order to benefit the entire industry.
AMLBot co-founder Slava Demchuk expressed concerns over the SEC’s approach to regulating the cryptocurrency market, which attempts to fit cryptocurrencies within existing laws designed for traditional financial institutions.
“I suppose all crypto market will support Coinbase in the battle against SEC. It seems like SEC’s latest active participation against crypto market participants aims at destroying the crypto market in the USA,” he said.
Nikolay Denisenko, co-founder and CTO of neo-digital banking app Brighty, highlighted the potential consequences of the SEC’s Wells notice for the ongoing debate about classifying cryptocurrencies as securities and Coinbase’s defense strategy.
“If Coinbase successfully defends itself, it could lead to increased regulatory clarity for the crypto industry, benefiting all parties involved. Coinbase has a strong interest in safeguarding its position, and by doing so, it contributes to the establishment of transparent regulatory guidelines for the future,” he said.
Intergovernmental Blockchain Advisor Anndy Lian called for a cooperative stance between Coinbase and regulators in establishing a clear legal framework around cryptocurrency in the U.S.
“Listing on Coinbase is so much harder than Nasdaq in my humble opinion. If Coinbase fails this preview, then no other companies in the U.S. will pass it. This is just a way for regulators to know more about the crypto business. The stance for Coinbase should be cooperative and work together with the regulators to create clear laws around crypto which will then benefit the whole crypto industry,” Lian said.
Coinbase described the investigation as “cursory” and said the notice provided “relatively little information” about the alleged violations.
This article was originally published on Benzinga and appears here with permission.