Coinbase cancels lending product due to SEC threat
Coinbase has announced plans to discontinue its Lend product after being pressured by the SEC.
Brian Armstrong-led crypto exchange, Coinbase, has abandoned its proposed plans to launch a crypto lending product, which the United Securities and Exchange Commission (SEC) has argued is a violation of its securities law.
Coinbase wilts under SEC pressure
Coinbase announced in an updated blog post that it would no longer launch the USDC APY program, and it has discontinued the waitlist for the program. The post reads: “As we continue our work to seek regulatory clarity for the crypto industry as a whole, we’ve made the difficult decision not to launch the USDC APY program.”
It continued, “We have also discontinued the waitlist for this program as we turn our work to what comes next. We had hundreds of thousands of customers from across the country sign up and we want to thank you all for your interest. We will not stop looking for ways to bring innovative, trusted programs and products to our customers.”
SEC keeps mum
Back in June, Coinbase had proposed the Lend product which would see its users earn up to 4 percent interest on selected crypto assets. However, the exchange revealed that it had received the threat of a lawsuit from the financial regulator if it continued with the plan.
The crypto exchange CEO had earlier highlighted how the Gary Gensler-led commission had refused to respond as to why it considered the product to be a security.
According to Armstrong:
“They refuse to tell us why they think it’s a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why.”
Interestingly, the SEC, as of press time, was yet to release an official statement against the allegations levied against it by the exchange.