Coinbase CLO Says Base Is “Not an Exchange” Amid SEC Scrutiny

Coinbase's Chief Legal Officer has firmly defended Base, the company's Layer-2 blockchain solution, against potential SEC regulatory challenges by clarifying that Base operates as "blockchain infrastructure" rather than a cryptocurrency exchange. This strategic positioning comes as regulatory scrutiny intensifies around Layer-2 sequencers and their classification within the broader cryptocurrency ecosystem.

The Base network has demonstrated significant growth momentum, with rising Total Value Locked (TVL) and increased DeFi activity across its platform. Recent developments include exploration of a native token launch and the opening of a Solana bridge, expanding cross-chain functionality for users seeking seamless cryptocurrency transactions between different blockchain networks.

This regulatory stance highlights the ongoing tension between traditional financial oversight and innovative blockchain technology. As Bitcoin and other cryptocurrencies continue mainstream adoption, Layer-2 solutions like Base are becoming crucial infrastructure for scaling Ethereum-based applications and reducing transaction costs.

The distinction between exchange operations and blockchain infrastructure could set important precedents for how regulators approach similar DeFi platforms and cryptocurrency service providers, potentially impacting the entire digital asset industry's regulatory framework moving forward.