Polygon, ex-Meta executives defend Coinbase following SEC Wells notice

Several notable cryptocurrency industry figures have come to the defense of Coinbase following the company’s receipt of a Wells notice.

Polygon comes to the defense of Coinbase

The Wells notice received by Coinbase indicates that the U.S. Securities and Exchange Commission likely intends to file charges against the exchange.

In response, Polygon Labs president Ryan Watt said in a March 23 tweet that the crypto industry “must stand behind Coinbase.” He noted that though Coinbase has gained the trust of the public, regulators and politicians “have eroded that trust.”

Watt further noted that many major companies such as Starbucks, Meta, and Nike have made use of public blockchains such as Polygon. He said that these major partnerships provide countless economic and job opportunities and warned that companies will instead work with blockchain firms overseas if regulators clamp down on the industry.

Polygon’s native token (MATIC) is listed on Coinbase.

David Marcus sides with Coinbase

David Marcus, former head of Meta’s crypto projects, acknowledged Coinbase’s engagement with regulators and its willingness to “play by the rules.” He lamented that cooperative companies are treated more harshly by regulators than those that commit fraud, noting that the now-collapsed FTX exchange did not experience regulations so strict.

Like Coinbase, Meta’s own Diem cryptocurrency project was affected by overregulation. This was one factor that led Diem to shut down in January 2022.

Other industry leaders comment

Jake Chervinsky, Chief Policy Officer of the Blockchain Association, also acknowledged that Coinbase spent an “extraordinary amount” of resources working with the SEC. The Blockchain Association said it “stands in support” of Coinbase.

Elsewhere, Ryan Selkis, CEO of crypto research firm Messari, sent a letter to members of Congress asking for fair regulation for the crypto industry. Though his letter does not mention Coinbase directly, it was seemingly prompted by the Coinbase Wells notice as it was composed on the same day. It was later re-tweeted by Coinbase CEO Brian Armstrong.

Justin Slaughter, Policy Director of the crypto-focused VC firm Paradigm, also commented on the situation. Slaughter previously held positions with the U.S. SEC and CFTC and suggested that some individuals in government are privately sympathetic to Coinbase.

Though the SEC has not yet filed charges against Coinbase, the company intends to fight the SEC in court if charges are indeed filed. If and when that happens, other crypto companies and leaders will likely come to Coinbase’s side.