SEC’s Wells Notice to Coinbase - Crypto Tokens and Securities

Fact of the Month
March 27, 2023

The regulatory status of various crypto tokens as securities remains uncertain in many countries, resulting from a lack of clear guidelines from regulatory bodies. This legal uncertainty is a significant issue, as demonstrated by the SEC's (U.S. Securities and Exchange Commission) issuance of a wells notice to Coinbase for potential securities law violations, despite the company's transparent and legally strict operations. Coinbase, a publicly traded company on NASDAQ, operates as a cryptocurrency exchange and offers custody services for crypto assets.

This situation highlights the need for clear and sound regulation in the crypto industry that allows for innovation while reducing uncertainty.

In Switzerland, the FINMA (Swiss Financial Supervisory Authority) evaluates crypto tokens and related activities on a case-by-case basis. When the qualification of a token is uncertain for the exercise of an activity, requesting a position and a non-action letter from the FINMA is a wise step to take.

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You can find Coinbase’s statement here
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