on the crypto
Coinbase CEO Brian Armstrong spoke about the US Securities Exchange Commission's approach to its planned DeFi lending service.
Brian Armstrong took to Twitter on September 8 to defend his company's stance against the latest attack by Uncle Sam's financial regulator, the SEC.
Here's what he said
In a blog post titled “The SEC told us it wants to sue us for Lend. We don't know why ". Coinbase's Chief Legal Officer Paul Grewal further explained the situation.
He says the company has been issued a "Wells Notice" by the SEC, explaining that this is the official way a regulator communicates to a company that it intends to sue in court.
A furious Armstrong claimed that millions of people have been lending crypto assets for several years for invest and earn returns. He added that Coinbase, which posted record revenue of $ 2 billion in the second quarter, contacted the SEC to inform them about the planned Coinbase Lend program.
No DeFi for Coinbase?
The Lend incentive, which has yet to be launched, allows "eligible users" in the United States to earn only 4% annual return on USDC deposits with guaranteed capital.
Apparently, the regulator, who recently stepped up DeFi monitoring, regards the loan and interest as security, much to the chagrin of the Coinbase boss who added:
“They responded by telling us that this loan feature is a security. Ok, it sounds strange, how can the loan be a guarantee? So we ask the SEC to help us understand and share their point of view ”.
He added that the company has complied with the SEC's endless demands, but is exasperated as to why they consider people who deposit their funds to earn a return a "security."
"They refuse to tell us why they think it's safe, and instead they ask us for a set of documents (which we respect), they demand testimony from our employees (which we respect), and then they tell us that they will sue us if we proceed to launch, without any explanation as to why ".
Why no clarity?
Armstrong said Coinbase is happy to comply with the law and regulators, but that the SEC does not provide clarity, rather engages in "behind closed door scare tactics."
He added that many other cryptocurrency companies were offering similar products suggesting that Coinbase had somehow been spotted. The tirade ended with "hopefully the SEC will step forward to create the clarity this industry deserves, without harming consumers and businesses in the process."
Coinbase has stated that, following all the actions, it will not launch Lend until at least October. In fact, it may never see the light of day.
