Coinbase, a publicly traded US crypto exchange, said it received a notice from the Securities and Exchange Commission warning of potential violations.
The SEC "Wells notice" is typically a precursor to enforcement action against a company. The notice from the securities watchdog didn't detail what assets were under scrutiny or what the possible violations consist of.
"Although we don’t take this development lightly, we are very confident in the way we run our business – the same business we presented to the SEC in order for us to become a public company in 2021," the company said in a statement. "If necessary, we welcome the opportunity for Coinbase and the broader crypto community to get clarity in court."
The company said its platform and services would continue to operate as usual.
The development is the latest move by an increasingly aggressive regulatory body to rein in crypto in the wake of multiple bankruptcies and scandals in the digital asset space last year. Calls for greater regulatory clarity and scrutiny have escalated since November, when crypto exchange FTX collapsed and set off an investor panic.