Coinbase CEO Brian Armstrong says the U.S. Securities and Exchange Commission (SEC) is threatening the crypto trade with a lawsuit.
The SEC tells Coinbase it can sue if the corporate launches a brand new lending product referred to as Lend, according to Armstrong.
Armstrong says the SEC claims the product, which is designed to permit customers to lend and borrow cryptocurrencies through the use of their holdings as collateral, would rely as a safety.
“We have been planning to go dwell in just a few weeks, so we reached out to the SEC to present them a pleasant heads up and briefing.
They responded by telling us this lend function is a safety. Ok – appears unusual, how can lending be a safety? So we ask the SEC to assist us perceive and share their view. We at all times make an effort to work proactively with regulators, and hold an open thoughts.
They refuse to inform us why they assume it’s a safety, and as a substitute subpoena a bunch of information from us (we comply), demand testimony from our staff (we comply), after which inform us they are going to be suing us if we proceed to launch, with zero rationalization as to why.”
Armstrong says Coinbase would gladly comply with the legislation if it knew the foundations.
“Look….we’re dedicated to following the legislation. Sometimes the legislation is unclear. So if the SEC needs to publish steerage, we’re additionally comfortable to comply with that.
But on this case, they’re refusing to supply any opinion in writing to the business on what ought to be allowed and why, and as a substitute, are participating in intimidation ways behind closed doorways.
We’re being threatened with authorized motion earlier than a single little bit of precise steerage has been given to the business on these merchandise.
If we find yourself in courtroom, we could lastly get the regulatory readability the SEC refuses to supply. But regulation by litigation ought to be the final resort for the SEC, not the primary.”
According to Coinbase’s chief authorized officer Paul Grewal, Lend won’t be launched till “a minimum of October”.
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