{"id":20609,"date":"2023-05-05T20:29:36","date_gmt":"2023-05-05T20:29:36","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/coinbases-arguments-a-surefire-loser-and-possibly-criminal-featured-bitcoin-news\/"},"modified":"2023-05-05T20:29:36","modified_gmt":"2023-05-05T20:29:36","slug":"coinbases-arguments-a-surefire-loser-and-possibly-criminal-featured-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/coinbases-arguments-a-surefire-loser-and-possibly-criminal-featured-bitcoin-news\/","title":{"rendered":"Coinbase’s Arguments ‘a Surefire Loser’ and Possibly Criminal \u2013 Featured Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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According to John Reed Stark, crypto exchange Coinbase\u2019s assertions that its business activities were endorsed by the U.S. Securities and Exchange Commission (SEC) when it approved its initial public offering are \u201ca surefire loser.\u201d According to Stark, the SEC\u2019s approval of Coinbase\u2019s registration statement was done to ensure the latter had made \u201cproper disclosures in their application.\u201d<\/strong><\/p>\n

SEC Not Constrained by Any Doctrine<\/h2>\n

John Reed Stark, a former chief of the U.S. Securities and Exchange Commission (SEC) Office of Internet Enforcement, has said the arguments that Coinbase\u2019s business activities were endorsed by the commission when it approved its initial public offering (IPO) are \u201ca surefire loser.\u201d Stark also said the assertion that Coinbase has \u201csome sort of regulatory safe harbor\u201d and that the SEC is constrained by some sort of doctrine \u201chas no basis in law or in fact.\u201d<\/p>\n

The remarks by Stark came just days after Coinbase chose to publicly disclose its response to the Wells notice it received from the SEC back in March. As reported<\/a> by Bitcoin.com News, Coinbase made clear its opposition to the SEC\u2019s enforcement actions. Coinbase also implied in its response that the SEC had in fact greenlighted its core business when it allowed the IPO to proceed. The company went public in April, 2021.<\/p>\n

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Some argue that when the SEC approved Coinbase\u2019s IPO, the SEC also approved Coinbase\u2019s business. What a crock and possibly a criminal offense. Yes, you read that correctly \u2014 a criminal offense. Having served as Chief of the SEC Office of Internet Enforcement for 11 years, IMHO,\u2026 pic.twitter.com\/aIQXgCRVNb<\/a><\/p>\n

\u2014 John Reed Stark (@JohnReedStark) May 1, 2023<\/a><\/p>\n<\/blockquote>\n

However, in his May 1 Twitter thread<\/a>, Stark, who worked for eleven years as an SEC chief, assailed the assertion that the commission\u2019s approval of Coinbase\u2019s registration statement amounted to an endorsement of the crypto exchange\u2019s activities. According to Stark, the SEC\u2019s approval of Coinbase\u2019s registration statement was done to ensure the latter had made \u201cproper disclosures in their application.\u201d<\/p>\n

\u2018No Approval Clause\u2019<\/h2>\n

To further support this argument, Stark pointed to regulations which compel companies seeking to raise funds from the public to insert a \u201cNo Approval Clause\u201d in their respective prospectuses. The intention of this clause is to inform prospective investors that regulators that include the SEC have neither approved nor disapproved securities being offered.<\/p>\n

The former SEC enforcement chief also shared more links<\/a> which seemingly support the argument that the Commission is not being constrained by some \u201csort of regulatory estoppel.\u201d<\/p>\n

Meanwhile, Stark also suggested in his tweet that Coinbase\u2019s own Form S1 Registration Statement under the Securities Act of 1933 proved that the crypto exchange was aware that its business activities had the potential to cause problems. He said:<\/p>\n

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Finally, Coinbase\u2019s Form S1 Registration Statement under the Securities Act of 1933, the form that Coinbase filled out to become a public company and the form that the SEC reviewed, disclosed that there is regulatory uncertainty regarding the status of their activities and that Coinbase could be subject to a litany of civil, criminal, and administrative fines, penalties, orders and actions (which is exactly what is happening right now).<\/p>\n<\/blockquote>\n

Stark ended the long tweet by reiterating that the \u201cno approval clause\u201d was a sufficient warning to Coinbase executives who may face potential jail time should the crypto exchange lose its fight against the SEC.<\/p>\n

What are your thoughts on this story? Let us know what you think in the comments section below. <\/strong><\/em><\/p>\n

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\nTerence Zimwara <\/h6>\n

\nTerence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons, Andriy Blokhin \/ Shutterstock.com<\/em><\/p>\n

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Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com<\/a> does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<\/div>\n

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