SEC's Warning Sends Coinbase Stock Plummeting.

The SEC has issued a Wells notice to Coinbase, indicating that the exchange may be operating in violation of securities laws related to its spot market, staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet. Coinbase has until March 29 to respond to the notice. The company has publicly criticized the SEC for its vague regulatory structure and has petitioned the regulator to explain how digital assets could fit within securities laws. Coinbase CEO Brian Armstrong tweeted that the company welcomes a legal process to provide clarity and demonstrate that the SEC has not been fair or reasonable in its engagement on digital assets. Shares of Coinbase were down more than 11% after-hours on Wednesday following the release of the news.