The U.S. Securities and Exchange is threatening to sue crypto exchange Coin base if it proceeds to launch its yield-generating product called Coin base Lend.
Coin base’s Lend Feature is a Security to SEC despite the Exchange Proving Otherwise
Coin base Lend will be a lending pool dealing with USD Coin (USDC). Users will contribute to a lending pool by sending their crypto assets to the Coin base Lend feature. From the pool, Coin base will lend out the crypto assets and in turn, pay users high-interest rates in exchange. According to the feature’s preview page, Coin base promises 4% APY to users. The Lend feature will enable Coin base to compete with popular decentralized finance (DeFi) products like Compound and Aave.
According to the U.S. financial compliance watchdog SEC, Coin base Lend feature would be considered as a security and liable to regulations as an investment.
Coin base CEO Brian Armstrong came out to strongly oppose SEC’s position on the Lend feature. According to Armstrong, Coin base informed SEC of the launch as a courtesy. Crypto exchange Coin base did not anticipate any kind of pushback considering several other platforms have similar features running.
Armstrong went on Twitter and commented that SEC was not clear on what it wanted. He further disputed SEC’s categorization of Lend as an investment contract. Rather, Armstrong described the feature as Coin base’s clients lending their USDC in their accounts in the course of an already existing relationship.
Additionally, Coin base will maintain the obligation to continue paying interest to its customers regardless of whether it makes a profit in its broader operations and business activities or not.
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Topic: Coin base Sees SEC’s Threat to Sue its Lend Feature as Unfair (Read 57 times)