Coinbase CEO Brian Armstrong commented on the US Securities and Exchange Commission’s tough approach to its planned DeFi lending service. On September 8, Brian Armstrong decided on Twitter to defend his company’s position from the latest onslaught of the financial regulator.
The SEC wants to sue Coinbase for a planned DeFi lend service
In a blog post entitled “The Securities and Exchange Commission, told us she wanted to sue us for Lend. We don’t know why.” Paul Grewal, Coinbase’s legal director, explained the situation further.
It states that the company has received a “Wells notice” from the SEC, and explains that this is the official way in which the regulator informs the company that it intends to sue it in court. Outraged, Armstrong said millions of people have been borrowing crypto assets for several years to make money. He added that Coinbase, which had record Q2 revenue of $ 2 billion, contacted the SEC to inform it of the planned Coinbase Lend program.
The launching Lend service only allows “eligible users” in the US to earn 4% annual return on USDC guaranteed principal deposits. The regulator, which has recently increased DeFi monitoring, considers loans and interest earnings to be a security, adding to the anger of Chief Coinbas, who added:
“They responded by telling us that this lending feature is a security. Well – it seems weird how a loan can be a security? We therefore ask the SEC to help us understand their views. “
He added that the company met the endless requirements of the SEC.
“They refuse to tell us why they think it’s a security, and instead ask us for a pile of records (we have complied), demand the testimony of our employees (we have complied) and then tell us that they will sue us if we continue, with zero explanation. “
Armstrong said Coinbase is law-abiding and working with regulators, but the SEC will not clarify anything and will instead engage in “intimidation tactics behind closed doors.”
He added that many other crypto companies offer similar products, suggesting that Coinbase was selected in some way. Let us therefore hope that we get the clearer regulation that this sector deserves, without harming consumers and society.
Coinbase said that as a result of all the actions, Lend will not run until at least October. In fact, the initiative may never see the light of day.