Coinbase abandoned product lending after SEC pushback

Coinbase update

Coinbase discontinues plans to launch new digital asset lending products U.S. securities regulator Those who warned that it would constitute unregistered securities and urged them to take legal action.

The U.S. largest crypto exchange said in a late Friday statement, “because we are continuing to work to pursue regulatory clarification across the crypto industry,” a “difficult decision” to shelve plans to offer Lend products. Said that he did.

This is an embarrassing climb for the coin base that CEO Brian Armstrong had. Hit publicly Earlier this month, the Securities and Exchange Commission claimed that the commodity did not constitute securities. He also accused regulators of lacking transparency and “rough action” in pursuing the company.

Coinbase first announced Lend in June. Initially, it offered a 4% annual interest rate to holders of the stablecoin USD coin. It opened a waiting list stating that it had collected “hundreds of thousands” of applications.

However, the SEC then warned that it would sue the platform when the product was launched and issued a subpoena to Coinbase for more information.

The SEC’s move has highlighted the legal debate at the heart of its regulatory approach to cryptocurrency platforms, with a focus on what constitutes security.

Under what is known as the Howie Test, the U.S. Supreme Court says when “people are led to invest their money in ordinary businesses and expect profits only from the efforts of promoters or third parties.” We have ruled that an investment contract exists.

Cryptographic platforms that provide an interest in digital assets have become increasingly popular these days due to the high yields they offer. Coinbase’s turnaround will hit other platforms in the fast-growing industry. Among them is Armstrong. Hold up as a hero — As a state regulator Circle the space..

New Jersey Attorney General’s Office on Friday at Celsius, Digital Asset Lending Platform Stop publishing Its lucrative product while Texas regulators are seeking hearings about whether to do the same. Five state agencies, Alabama, Kentucky, New Jersey, Texas, and Vermont, have taken similar steps against another crypto lending platform, BlockFi.

In a Senate Banking Commission testimony last week, SEC chairman Gary Gensler said that “a large number” of cryptocurrencies are securities, indicating that regulatory crackdowns could continue.

He was fired by Pat Toomey, a Republican Senator in Pennsylvania.[ing] “By enforcement” rather than issuing public guidance on which cryptocurrencies are eligible for securities. The SEC Chair said there was “significant clarity.”

“We have expressed serious concerns about consumer protection:Archetypal Old West) Western RegionThe cryptocurrency market he said is “full of fraud, fraud and abuse.” He also urged Congress to give regulators more authority to oversee crypto exchanges and invited a platform to register with the SEC.

The SEC didn’t immediately respond to a request for comment on Coinbase’s decision to abandon Lend.

Coinbase said: “We never stop looking for ways to provide our customers with innovative and reliable programs and products.”

Coinbase abandoned product lending after SEC pushback

Source link Coinbase abandoned product lending after SEC pushback

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