Cryptocurrency exchange Coinbase ditched its planned lending product after the Securities and Exchange Commission (SEC) warned that its launch would be tantamount to offering unregistered securities, with all the ensuing consequences.
“We made the tough decision not to launch the previously reported USDC asset return program,” the company writes. – We also eliminated the waiting list for participation in it. We have received hundreds of thousands of applications from the territory of the country and we want to thank all of you. “
The link that the Lend product was supposed to follow now leads to the Coinbase home page.
For the first time, the exchange announced plans to create Lend in June. According to her, the SEC has notified the company that the launch of such a product on the market would be a violation of the law. Among other things, the regulator demanded testimony from Coinbase employees, including CEO Brian Armstrong.
Armstrong himself stated that the SEC did not clarify why the product should be recognized as a security, and called the regulator’s behavior questionable. Lawyers, however, such as Preston Byrne of Anderson Kill, supported the authorities’ position in this situation. Such a product is actually an unsecured bond, and therefore must be regulated by the SEC, he explained.
Concurrently, other crypto lending platforms in the US, including BlockFi and Celsius, have started to experience problems over the past weeks. State regulators are asking them to explain why the products they are offering are not securities and are demanding an end to the illegal activity.
Stay in touch! Subscribe to World Stock Market in Telegram.