David Schwartz, CTO of Ripple, commented on the Wells notice received by Coinbase from the SEC, indicating that clear guidelines for regulating digital currencies are missing. Schwartz noted the regulator’s inability to establish clear rules for legislation in this area, leading to companies struggling to comply with the laws correctly.

The Wells notice is an official notification that gives the recipient an opportunity to respond to the allegations before the regulatory agency decides to go to court. Schwartz suggested that new legislation and regulations would be better tools for defining the law in this industry instead of the enforcement actions that regulators typically follow.

Coinbase has filed more than 30 submissions to the SEC over nine months, but the regulator has not spoken on the matter. Coinbase’s trading and custody services have not changed much since 2021, and the company’s business model remains the same. Coinbase believes that the digital regulatory environment in the United States needs more guidance rather than more enforcement.

Providing clear guidelines for regulating digital currencies in the United States is essential for companies to comply with the laws correctly, but this appears to be a difficult task at present.