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Wednesday, 03/22/2023 11:52:38 PM

Wednesday, March 22, 2023 11:52:38 PM

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Anyone with money at Coinbase, you may want to rethink that, before you can't.

Coinbase Becomes Second Crypto Firm to Receive SEC Wells Notice

"...Popular U.S.-based crypto exchange Coinbase may soon find itself in hot water with federal regulators.

The company’s CEO, Brian Armstrong, announced on Twitter Wednesday (March 22) that the exchange has received a Wells notice from the U.S. Securities and Exchange Commission (SEC) tied to Coinbase’s listing of potential unregistered securities across its suite of digital asset products and services.

“Based on discussions with the Staff, the Company believes these potential enforcement actions would relate to aspects of the Company’s spot market, staking service Coinbase Earn, Coinbase Prime and Coinbase Wallet,” Coinbase said in a statement.

Wells notices are not formal charges or lawsuits, but can often lead to them.

Most recently, at least for the digital asset sector, Paxos, a New York-regulated blockchain infrastructure and financial services platform, was issued one.

Paxos sunset its Binance-branded stablecoin product in response to the SEC notice.

Just as the Paxos Wells notice led to the retirement of its BUSD stablecoin, the SEC pressure on Coinbase has reportedly already killed the company’s staking reward product for at least one crypto token, Algorand.

“I woke up this morning to find Coinbase killed rewards … they are evaluating their services in light of recent regulatory scrutiny, and, for that reason, they will no longer support Algo rewards for Retail customers,” tweeted the Algorand CEO.

Coinbase users can still earn staking rewards from the Ethereum, Cosmos, Tezos, Cardano and Solana blockchain, per the Coinbase site..."

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