Bitcoin Price and Crypto Market Tank Over SEC’s Action on Coinbase

The U.S. Securities and Exchange Commission (SEC) has been going hammer and tongs after crypto companies and crypto exchange Coinbase (NASDAQ: COIN) is the recent one facing the SEC action. On Wednesday, March 22, the SEC issued a Wells Notice to Coinbase over doubts about the listed digital assets, their staking services, and other things.

A Well Notice is basically an earlier indication by the SEC to a company recommending that they are likely to take enforcement action over the possible violation of securities laws. However, Coinbase has said that they are confident in the legality of its assets and services.

The US-based crypto exchange also stated that it is ready to take the legal route if required, adding that the SEC hasn’t been fair enough in its engagement with digital assets.

Coinbase also lashed out at the SEC for not providing enough information about the claims and charges, but rather playing optics. It also said that while they have been asking for reasonable crypto rules for Americans, they received SEC threats in return. In response to SEC’s actions, Coinbase’s chief legal officer Paul Grewal writes:

“We asked the SEC specifically to identify which assets on our platforms they believe may be securities, and they declined to do so. Today’s Wells notice also comes after Coinbase provided multiple proposals to the SEC about registration over the course of months, all of which the SEC ultimately refused to respond to”.

Bitcoin and Crypto Market Correct

The SEC’s action on Coinbase has put pressure on the roaring crypto market. The Bitcoin (BTC) price is down by more than 3% and is currently trading at $27,395 and a market cap of $529 billion.

Ethereum (ETH) is also down by 3.50% trading at $1,741 levels while other altcoins have dropped anywhere in the range between 4-8%. Another reason behind the recent pressure on the crypto space could be the Fed’s decision to increase interest rates by 25 basis points on Wednesday, March 22. This development comes despite the recent turmoil in the US banking system.

Crypto Industry comes In Support of Coinbase

Coinbase CEO Brian Armstrong has shown confidence over the recent SEC action stating that moving to the courts will help them open up the discussions in from of the public. In his recent tweet thread, Armstrong wrote:

“Going forward the legal process will provide an open and public forum before an unbiased body where we will be able to make clear for all to see that the SEC simply has not been fair, reasonable, or even demonstrated a seriousness of purpose when it comes to its engagement on digital assets”.

He added that in the meanwhile, Coinbase will continue to build trusted products and services for its customers. Armstrong also said that two years ago, as Coinbase went for a public listing, the SEC had thoroughly reviewed its business. He added that Coinbase conducts “a rigorous review process” of listing new tokens.

Popular crypto lawyer Jake Chervinsky wrote: “Coinbase has spent an extraordinary amount of time and resources working in good faith to seek regulatory clarity from the SEC. The idea that they’d be rewarded with nothing but a Wells notice is sad, but not surprising from an agency best known for regulating by enforcement”.

Founder at Custodian Bank, Caitlin Long slammed the Biden administration adding: “IT SHOULD BE CRYSTAL CLEAR BY NOW that the Biden Administration wants all #crypto (even the legit parts of it)–run out of the U.S. See also yesterday’s White House economic report, which dunked on all financial innovation while espousing the “stability” of traditional banks”. 

On Wednesday, the COIN stock tanked by more than 8% and another 15.6% in the after-market hours. The COIN stock has faced brutal correction ever since its listing, back in April 2021, and is down nearly 80% from its peak. However, the COIN stock has recovered strongly this year and trading 129% up year-to-date.

Yesterday’s development comes a day after the Coinbase lawyers argued their first case in the US Supreme Court over an arbitration process.