The Nasdaq-listed crypto exchange said the Securities and Exchange Commission seems to be undermining its own role as the monitor of companies registering to sell shares to the public.

Coinbase, the largest cryptocurrency trading platform in the U.S., said the move by the SEC to threaten legal action against the exchange for alleged violation of securities laws, did not make sense when the same regulator approved the Coinbase application, or S-1 document, to sell shares to the public in April 2021.  

Coinbase made the comments in a 73-page report released on Thursday by its legal team in response to a so-called Wells notice issued last month by the SEC, which warned it was considering legal action against the exchange over its cryptocurrency staking services and other products.

If the SEC believed that Coinbase’s core businesses violated securities law, “it would have been required by its own mandate to prevent the S-1 from becoming effective to protect the investing public,” the report says. “Instead, it allowed the offering to proceed, and millions of members of the public invested their savings in Coinbase.”

(by Timmy Shen)