Coinbase Global Inc. is being investigated by the Securities and Exchange Commission (SEC) for a lending programme it proposes to sell, and the SEC has signalled that it would sue the business over the offering, according to Coinbase.
WASHINGTON: The Securities and Exchange Commission (SEC) has informed Coinbase Global Inc. that it intends to sue the cryptocurrency exchange if it proceeds with plans to create a programme that allows users to earn interest by lending digital assets, according to Coinbase.
Coinbase’s chief legal officer, Paul Grewal, said in a statement on Tuesday that the top US markets regulator has given the business notice that it wants to legally prosecute the company.
The debut of Coinbase’s ‘Lend’ product has been postponed until at least October.
In reference to it, Paul Grewal wrote a satirical tweet stitching the coinbase SEC tweet along with it.
The Securities and Exchange Commission (SEC) has been increasing its investigation of the cryptocurrency industry.
Crypto supporters had anticipated that Gary Gensler, who took over as chair of the Securities and Exchange Commission in April, would bring rule clarity to an industry that had hitherto operated in a regulatory grey area.
Coinbase CEO Brian Armstrong slammed the SEC for its treatment of the company’s plans to launch a loan product that the SEC has declared to be a security in a lengthy Twitter thread.
Coinbase’s CEO and chief legal officer both stated that they disagree with that viewpoint. After notifying the SEC of plans to move forward with ‘Lend’ in a few weeks, Armstrong claimed he received the legal letter after months of trying to interact with regulators.
Cryptocurrency lending programmes are growing increasingly popular around the world, but some regulators, particularly in the United States, are expressing concerns, stating that such products should follow to existing securities standards.
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