The SEC has issued a Wells notice to Coinbase, its second warning to the crypto exchange this year.
The SEC said it has identified potential violations of U.S. securities law. Following news of the notice, Coinbase shares closed ~8% lower on Wednesday, then fell an additional ~16% during extended trading.
A Wells notice is usually one of the final steps before the SEC formally issues charges.
- Responding to the notice, Coinbase CEO Brian Armstrong said the company is “right on the law, confident in the facts, and welcomes the opportunity for Coinbase to go before a court.”
- Coinbase Chief Legal Officer Paul Grewal said the company is very confident in the way it runs its business.
- The SEC has increased scrutiny of the crypto sector following the high-profile collapse of multiple firms, including 3AC, Celsius, Voyager, and FTX.
