By George Ward
The Chief Technical Officer (CTO) of Ripple Labs, David Schwartz, has slammed the US Securities and Exchange Commission (SEC) over unclear crypto guidelines and the recent Wells Notice issued to Coinbase. America’s leading crypto exchange, Coinbase, was sent a Wells Notice by the regulator indicating a likely enforcement action against it.
David Schwartz Slams SEC
In a Twitter post, the XRP Ledger developer criticized the US regulator for failing to provide clear rules for the crypto industry. In addition, Schwartz slammed the SEC over its recent Wells Notice to America’s biggest crypto exchange, Coinbase.
For emphasis, a Wells Notice is a formal notification issued by the financial watchdog to a recipient demanding a response before the regulator files a lawsuit in court. Moreover, Schwartz’s remarks align with Paul Grewal, Coinbase’s chief legal officer’s comment to the SEC calling for clear rules for the crypto sector and that the exchange is willing to abide by them.
Grewal was reported to have stated that the SEC has not been fair in their engagement with the digital asset ecosystem and that adequate legislation is a better tool to define the law than enforcement actions.
Per reports, Coinbase has revealed that it is confident in its assets and services’ legitimacy and will defend itself in court if necessary. Coinbase has reportedly met over 30 times with the SEC for over nine months, with sources familiar with the issue stating that the exchange has repeatedly clarified its service operations at each meeting.
Furthermore, the exchange’s staking and trading services have remained unchanged since 2021, while its core business model remains untouched.
Guidelines, Not Enforcement
Meanwhile, Coinbase’s stance on the recent development is that the US crypto ecosystem needs comprehensive guidelines, not more enforcement actions. According to the firm, its staking services under any legal standard, especially the Howey test, are not securities as the regulator believes.
However, Ripple’s CTO addressed concerns over the company’s decision not to seek a no-action letter from the commission before launching the XRP token. Schwartz noted that he was never part of the process at the initial stage, and the fact that other crypto firms have gotten positive results doesn’t mean that Ripple Labs would have benefitted from it too.
In another development, XRP’s short-term growth rate has been impressive. However, experts warned that investors should consider some of the asset’s underlying metrics concerning its price actions before making their investment decision.
For example, XRP’s trading volume was overshadowed by a negative trend in the past 24 hours, tumbling by over 38%. This implies that traders are less keen on betting on the asset than widely assumed.