Brian Armstrong provided information on Twitter on Sept. 8 to defend his companies position against the newest report from Sam financial regulator, the Security Exchange Commission.
In a blog post titled “The SEC has told us it wants to sue us over Lend. We don’t know why.” Coinbase’s Chief Legal Officer, Paul Grewal, explained the case further.
It states that the corporate was issued a “Wells notice” by the Security Exchange Commission, explaining that this is often the official way a regulator tells a firm that it intends to sue it in court.
An incensed Brian Armstrong said that numerous people are lending out crypto assets for several years to earn yields. He added that Coinbase, which had a record $2 billion Q2 revenue, had reached intent on the Security Exchange Commission to brief them on the planned Coinbase Lend program.
Does it mean No DeFi For Coinbase?
The Coinbase Lending incentive, which has yet to launch, enables “eligible users” within the U.S. only to earn 4% annual yields on USDC deposits with a guaranteed principal.
Regulator has increased DeFi monitoring recently, views lending and interest-earning as security, much to the chagrin of the Coinbase boss who added:
“They responded by telling us this lend feature is a security. Ok – seems strange, how can lending be a security? So we ask the SEC to help us understand and share their view.”
He added that the corporate has complied with the never-ending demands from the SEC but is exasperated on why they consider people depositing their own funds to earn a yield a “security.”
“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.”
Why There is No Clarity Regarding Coinbase Lending Services?
Brian Armstrong stated that Coinbase is happy to fits the law and regulators, but the SEC won’t provide clarity but instead engages in “intimidation tactics behind closed doors.”
Brian Armstrong added that a lot of other crypto companies were offering similar products suggesting that somehow, Coinbase had been singled out. The tirade concluded with “hopefully the SEC steps up to make the clarity this industry deserves, without harming consumers and firms within the process.”
Coinbase stated that as a results of all the action, it’ll not be launching Lend until a minimum of October. In reality, it’s going to never see the sunshine of day.