U. S. Security and Exchange Commission (SEC) Warns to sue Coinbase Global Inc. if the Crypto exchange went ahead with its plan of digital asset lending project.
One of the top cryptocurrency exchange in the United States is bearing the brunt of strict crypto laws in the country. SEC told Coinbase that legal action might be taken against the company if it launches the ‘Lend’ program. In the lending project, users will be allowed to lend their digital assets and earn interest.
The product is now delayed for launch until October as per Coinbase’s Chief Legal Officer Mr. Paul Grewal.
SEC considers the ‘lend’ product to be a security. However, Coinbase’s Legal team says that ‘Lend’ is neither an investment contract nor security.
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The CEO of Coinbase, Brian Armstrong, took to Twitter to show his unhappiness over ambiguity created by SEC. He said that his team is unable to understand how ‘lend’ is deemed a Security by the regulators. In the series of tweets, Armstrong criticized the ‘closed doors’ intimidation tactics.
7/ Look….we’re committed to following the law. Sometimes the law is unclear. So if the SEC wants to publish guidance, we are also happy to follow that (it’s nice if you actually enforce it evenly across the industry equally btw).
— Brian Armstrong (@brian_armstrong) September 8, 2021
The lending programs involving cryptocurrencies are widely popularised in the world. However, due to the ‘Wild West’ nature of the currency, many regulators are still not clear on the program’s legitimacy. The United States in particular is trying to contain the disruptions caused by digital currencies in the world of finance.
Coinbase recently became the first-ever Crypto exchange to publicly list on Nasdaq.