The recent issue of Wells notice by The U.S. Securities and Exchange Commission (SEC) against the Coinbase crypto exchange has fired up the market once again. Brian Armstrong, the CEO of the cryptocurrency exchange Coinbase in the United States, has revived calls for crypto users to “elect pro-crypto candidates.”
Armstrong stated in a March 23 Twitter Spaces debate that Coinbase will make attempts to organize the roughly 50 million US people who use cryptocurrency into a political force. Since Thursday, Coinbase’s shares have fallen almost 15% since Thursday afternoon.
Armstrong’s call to action was the latest step in the Coinbase CEO’s shift toward combining business and politics. Coinbase has gotten more political since announcing plans to go public in April 2021. Armstrong has spoken with politicians and regulators in the United States, and Faryar Shirzad, chief policy officer, has announced the establishment of a voter registration gateway in August 2022. With the start of the Crypto435 campaign in February, Coinbase called on its customers to “advance pro-crypto policy in all 435 Congressional Districts across the United States.”
Despite the Wells warning, it is unclear whether the SEC plans to take enforcement action against Coinbase. According to Coinbase’s chief legal officer, Paul Grewal, the company has “simply been told nothing” about specific assets or services the SEC may be targeting. Historically, the SEC has not been kind to the cryptocurrency sector. As previously stated, the SEC does not have any market rules and regulations in place. Members of the crypto community, as well as legislators, have frequently criticised Gary Gensler, the chair of the SEC, for taking an anti-crypto stance towards the industry.
“A reprehensible amount of resources and brainpower have been spent in the U.S. trying to engage with this SEC and trying to create substance and a path out of the wraithlike comments issued by the agency,” Crypto Council for Innovation CEO Sheila Warren said.
The SEC’s Office of Investor Education and Advocacy issued a warning concerning crypto asset securities in a notice posted on Thursday. According to the regulator, crypto investments may be extremely volatile and speculative, and the platforms where investors buy, sell, borrow, or lend these securities may lack important investor protections. Earlier, SEC sent Wells notices to companies like Kraken and Paxos.