The U.S. Securities and Exchange Commission (SEC) looks to be bringing an enforcement action against crypto exchange Coinbase.

In an 8-K filing on Wednesday, Coinbase disclosed that it had been served with a Wells Notice from the SEC. The Wells Notice is a document issued by the regulator, notifying them of an impending lawsuit.

Based on discussions with SEC staff members, Coinbase believes that a potential enforcement action would be related to its crypto spot market services, Earn product, Coinbase Prime and Coinbase Wallet offerings.

Coinbase CEO Brian Armstrong notified his Twitter followers of the Wells Notice, saying that the SEC had already reviewed its business in detail before the company went public in 2021.

Paul Grewal, the crypto exchange’s chief legal officer, shared his disappointment in a blog on Coinbase’s website titled “We asked the SEC for reasonable crypto rules for Americans. We got legal threats instead.” 

According to Grewal, the Wells Notice relates to an investigation that was disclosed last summer and Coinbase believed it had entered resolution talks with the SEC.

Contrary to SEC Chairman Gary Gensler’s claim that all crypto firms can come in and register with the agency, Grewal says there is no existing way to do that. 

Despite meeting with the SEC more than 30 times over nine months, he said the agency did not raise questions about assets on the platform or provide any feedback about Coinbase’s proposals to register a part of its business with the agency. 

“The SEC staff agreed to provide feedback in January 2023. In January, the day before our scheduled meeting, the SEC canceled on us and told us they would be shifting back to an enforcement investigation,” said Grewal.

There could be a lot more Wells Notices handed out to crypto firms in the near future, said Custodia Bank CEO Catilin Long in an episode of Unchained. 

“There’s a lot that hasn’t been announced that I happen to know about behind the scenes, that people have confirmed,” she said.