Coinbase, in an update to a blog posting from months ago, has announced that it is withdrawing its plans to launch a USDC APY loan program on the platform due to increasing legal pressure from regulators.
Coinbase Becomes a Member of the SEC
Coinbase posted a June blog update that revealed the news. It announced a new lending product. The team announced that it has ended its waitlist for American customers, after encouraging them to sign up. This was despite the fact that they had attracted thousands of American customers.
The update states that “Our goal is create great products for customers and to further our mission to increase economic liberty in the world.” “We have made the difficult decision to not launch the USDC APY Program as we continue to work towards regulatory clarity for crypto industry in general.
Coinbase seems to be following the lead of CEO Brian Armstrong’s tweet earlier this month, citing “regulatory certainty” as a reason for putting off the lending service.
He blasted the SEC for its difficulty and inability to clarify regulatory requirements on September 7, despite numerous attempts by his company to comply with them and communicate with them. Armstrong strongly disagreed with the SEC’s decision to sue Coinbase for the aforementioned loan program, but he agreed to follow their lead.
Coinbase promised that it would continue to bring “innovative and trusted products and programs” to the market after the update was completed.
The Problem of Determining Security
Armstrong and the SEC are at the core of their dispute over what constitutes security.
Armstrong views Lend as a loan product for which precedents have been established many times.
The SEC has been a significant hurdle for the American cryptocurrency industry. Numerous businesses have tried to apply for ETFs and lending products from the SEC, but they were unsuccessful. This is despite having Canadian neighbors who have accepted both of these products.
Marla Brooks – Financial Analysis
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