Crypto exchange Coinbase saw its stock plunge in after-hours trading on Wednesday after weeks of continued growth. The company’s shares have been close to 20 percent down compared to their close price of $77.14 due to a warning from Securities and Exchange Commission (SEC).
In a regulatory filing on Wednesday, Coinbase disclosed that they had received a Wells notice from SEC. The Wells notice is sent to companies and individuals “at the conclusion of an SEC investigation that states the SEC is planning to bring an enforcement action against them. “SEC has sent the same notice to several other crypto companies in recent weeks while performing other enforcement actions related to the crypto market.
Coinbase addressed the Wells notice in a blog post, saying that it plans to challenge SEC’s actions and believes it did nothing wrong.
“We are confident in the legality of our assets and services, and if needed, we welcome a legal process to provide the clarity we have been advocating for and to demonstrate that the SEC simply has not been fair or reasonable when it comes to its engagement on digital assets,” the company stated.
Before the recent dip, Coinbase shares have been 130 percent up year-to-date. However, this is still close to 60 percent down compared to the same period in 2022.