The United States Securities and Exchange Commission (SEC) is reported to clarify the fact that even if it accepts a firm’s S-1 form, it is not an indication that the corporation is not functioning or will cease to exist in “violation of the law.”
SEC did not Give Coinbase its ‘Blessing’
According to court documents from the SEC vs. Coinbase pre-motion hearing on July 13, the SEC claimed that it refused to sign off on Coinbase’s organizational layout following the time it gave it the all-ahead to go accessible in April 2021.
Peter Mancuso, trial attorney on behalf of the SEC states: “Your Honor, I’ll say that simply because the SEC allows a company to go public does not mean that the SEC is blessing the underlying business or the underlying business structure or saying that the underlying business structure is not in violation of the law.”
Getting Rid of Skepticism
As a response to Mancuso’s remarks, US District Judge Katherine Polk Failia said: “Let’s just pause so I can just sort of get rid of the skepticism I currently have as I hear that answer.”
She then said: “I am not saying that the commission should be omniscient at the time it’s evaluating a registration statement and that it should know all things.”
Coinbase vs SEC
Coinbase has faced prolonged inspections and legal battles with US officials. The SEC first accused Coinbase in 2019 for suspected unregistered securities offers. Coinbase’s loan facility once was the subject of a SEC complaint in 2021, which raised concerns about security for investors.
It is worth noting that Coinbase issued a letter to the SEC last month accusing the agency of disregarding its demand to build a regulatory framework for digital assets and continuing to dodge Coinbase’s rulemaking petition.
On June 1, the CEO of Coinbase said in a Wall Street Journal interview that the US should achieve “regulatory clarity,” noting that other nations, including the UK, have just one financial regulator, whereas the US now has a “turf war” between two regulatory agencies.