SEC’s Coinbase enforcement action deemed a power play by crypto community

The cryptocurrency community rallied in support of Coinbase after it revealed it had received a Wells Notice.

a wells notifications Refers to formal notice that the SEC intends to take enforcement action against the recipient.

Founder of Custodia Bank Kaitlyn Long “All Exchanges” sent out a Wells Notice in early February, but no actions were made public at the time.

Citing coordinated enforcement against Paxos and Kraken, she said US authorities are “absolutely” targeting cryptocurrency companies.

“Absolutely, I have no doubt that they are definitely going for it.”

coinbase fight

Coinbase CEO Brian Armstrong posted a tweet thread addressing the issue.he Labeled Incidentpart of the journey” to positively change the US financial system.

Additionally, Armstrong is so confident in the exchange’s compliance that he welcomed the opportunity to prove it in court.

“circlee is legally correct, confident in the facts, and welcomes the opportunity for Coinbase (and thus the broader crypto community) to go to court.”

He hopes legal proceedings will shed light on the SEC’s unfairness and unreasonability.When it comes to our involvement in digital assets, we have shown serious purpose. ”

The Crypto Community Reacts

David MarcusLightspark co-founder Coinbase said it chose to follow the rules from the start while actively engaging with regulators. He questioned why the SEC treats shady businesses better and lashed out at the establishment’s handling of it.

Similarly, co-founder of Polygon Sundeep Nail Wall Agreeing with Marcus, he said the situation was chaotic for Coinbase.The gold standard for compliance’ He signed off by asking:Itadaki [sic] What are you doing over there in America? ”

Scott MelkerHost of the Wolf of all Streets Podcast, he confidently declared that the SEC would lose in court.

Push to CBDC?

As pointed out above, the enforcement action against Coinbase makes little sense at face value.However, angel investors @Jason I described the situation as a power play to counter crypto adoption.

“No one in power would be willing to give away a money-printing franchise… umm… to anyone!“

VanEck Strategy Advisor Gabor Grubacs extended this point by stating that an “all-out war” is being waged against local banks and cryptocurrencies. He said that thisShow of power to encourage compliance‘ while noting that the United States recently posted a revised CBDC paper.

As Former BitMEX CEO Arthur Hayes Local banks are said to be under pressure because the recently announced Bank Fund Term Program (BFTP) does not cover the types of assets these small businesses commonly hold.

“The stress will be on banks that hold the majority of their loan books outside of the U.S. Treasury and non-mortgage-backed securities because they are not insured.”

Despite Garbach’s pessimism about local banks, Hayes predicts the Fed will yield and eventually support all kinds of assets banks can hold.