‘Coinbase’s SEC Defense is Criminal’, Former SEC Chief Says

John Reed Stark, the former Chief of the SEC Office of Internet Enforcement has faulted the current argument of American publicly traded exchange Coinbase Global Inc as it concerns its defense against the markets regulator. As far as John Reed is concerned, the argument from the trading platform that the regulator approved its Initial Public Offering (IPO) back in 2021 and as such, has a good knowledge of its business is flawed.

Why, IMHO, Coinbase's SEC Defense is Criminal

Coinbase and its shills argue that when Coinbase’s SEC initial public offering (IPO) registration went effective, the SEC somehow also approved the bonafides of Coinbase’s business. What a crock and possibly a criminal offense. Yes,… pic.twitter.com/5QyWYTcA8f

— John Reed Stark (@JohnReedStark) June 10, 2023

John Reed said the role of the SEC as far as IPO filing is concerned is to review whether or not the applying company made the right disclosures. According to the former regulatory Chief, the SEC always issues a bold disclaimer in every prospectus that legally recuses the commission of exactly the same claims that the exchange plans to use as a cover. 

For emphasis, John Reed published a sample of the statement which reads;

“The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if the prospectus or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense,” with the bold emphasis added by John Reed.

He added that the SEC’s role is to help investors make their investment decisions based on the availability of the right decision and according to him, Coinbase claiming the commission is aware of its business will not help its defense in the course of the suit.

Coinbase Has a Long Road to Trail

As it stands, Coinbase as an exchange has a very long road to trend as it has two lawsuits pending with the US SEC. First, the trading platform sued the Gary Gensler-led commission for failing to provide regulatory clarity as it has demanded severally.

The second lawsuit which is obviously the most important is the charges on the trading platform for supporting the trading of unregistered crypto securities like Cardano (ADA), Solana (SOL), Filecoin (FIL) and Polygon (MATIC) amongst others. 

The legal battle will be a long haul for the trading platform judging by the legal battle between Ripple Labs and the market regulators.