On Thursday, Coinbase, the cryptocurrency exchange, responded strongly to the Wells notice issued by the Securities and Exchange Commission (SEC) last month. In their response, Paul Grewal and Brian Armstrong made rational arguments and expressed their desire to operate with transparency.
The CEO also revealed the reason why he made a thoughtful and strategic decision to start the Coinbase company in the US based on several key factors. He recognized the potential of the US market as a major player in the global economy, as well as its reputation for upholding the rule of law. Additionally, he recognized the US as a financial and technology hub, making it an ideal location for a startup.
Armstrong explained that he had seen a country that has gone through hyperinflation and where people have lost trust in the currency can experience a variety of economic and social consequences In such a country, people may turn to alternative currencies or bartering systems as a means of exchange.
Armstrong explained that the idea is to do the right thing in the absence of clarity and to show good faith effort, which would allow for the safe and thoughtful introduction of this technology to a large audience, potentially a billion people in the future.
He said that proactively working with regulators can be a smart approach, as it can help to ensure that the technology is introduced in a way that is both safe and compliant with any relevant regulations or laws.
They said that they are committed to working within the regulatory framework when it comes to trading crypto assets. They want to see a clear market structure for trading crypto securities, while also recognizing that not all crypto assets are securities – ‘there are also crypto commodities, stablecoins, and even crypto that can be classified as artwork.’
Finally about the ‘wells notice’
“A Wells notice at this stage when there is not a clear rule book is not constructive and
it’s not good for America. We are prepared to defend that position.”
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