Coinbase Lend is a new project which now faces a lawsuit from the Securities and Exchange Commission and does not have any exact reasons for the case against them. This has made CEO Brian Armstrong speak out on social media to explain their side and what has transpired over their run-in with the regulators.
The crypto trading platform has been known to feature a lot of offers for its customers, including that of a savings account that has a higher APY than regular banks generally used now. Coinbase has made cryptocurrency more accessible to people, and it is a platform that is generally trusted among users.
Coinbase Lend: SEC Lawsuit
According to Brian Armstrong via Twitter (@brian_armstrong), Coinbase has been aiming to launch a new product that would compete with decentralized finance (DeFi) products which immediately faced an SEC alert. The notice said that it talked about the Coinbase Lend as a "security" and has not given the company any explanation.
1/ Some really sketchy behavior coming out of the SEC recently.— Brian Armstrong (@brian_armstrong) September 8, 2021
The regulators were said to have threatened a lawsuit against them if they push with the launch of their new product, about it as a "security" that did not elaborate how or why. Armstrong has explained the company's side on the platform, where he has also mentioned that the SEC is being "sketchy."
The company's chief legal officer, Paul Grewal, has released a blog post regarding this issue, which talked about how the "threats" of the SEC were clueless for them, as it did not pertain to any violations.
Additionally, Coinbase said that it would not be a security risk, as it only grows money for the users and gives an additional rate.
Coinbase Wants SEC Reason
Armstrong has gone on his social media to discuss more of what has transpired over their run-in with the commission, which was against their "Lend" project since the beginning. The CEO said that they were threatened with a lawsuit if it ever releases, where their plans would be already nearing.
The SEC was said to refuse to cooperate with the company and does not even tell them the reason why their product is flagged or considered as a "security" among the regulators. Armstrong said that they repeatedly reached out to the SEC prior to their product launch, up to when they were asking for an explanation.
Coinbase Lend: What is It?
Coinbase Lend is a platform where users can earn after "lending" their cryptocurrency assets which they own. The interest rate is at around 4% APY and is the starting rate for all users as they continue and participate in the project.
The money would continue to grow and would also be like an investment in the platform.
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Written by Isaiah Richard