Coinbase, one of the largest crypto exchanges in the world which also has a lot of associated products as well, has said that the SEC might choose to sue the company over its new lending product named Lend.
Of late, the SEC has been coming down hard on the crypto ecosystem and its actions include giving a tough time to Ripple as well. But at the same time, there does not seem to be a consistency and a clear direction on what they would like to do. While on the one hand, the SEC Chair is generally supportive of the crypto industry and says that it needs to be regulated rather than shut down outright, on the other hand, crypto companies and firms continue to face the wrath of the SEC. The latest to be on the receiving end is Coinbase as it faced heat over its LEND product where users will be able to lend out their crypto assets and make anywhere around 4% returns on an annual basis.
The company said that it voluntarily took the product to the SEC for getting its approval rather than launching on its own as it did not want to get into regulatory issues later on. All the information was provided to the SEC, the company claims, and it was also explained that this program was not a security and doesn’t necessarily need their approval. The SEC proceeded to request for all the contact details of the customers on the waitlist of the product which the company had refused to share due to privacy issues. The company has said that though all the questions have been answered, there has been no response from the SEC and the only response has been that Coinbase would be sued by the SEC if they went ahead with the launch of the LEND product.
Despite repeated attempts to reach out to the SEC to clarify their stand and their reasoning for not approving the product, there has not been any sort of communication from the SEC, though publicly, it continues to request the crypto industry leaders to come and talk to them and that they are willing to listen to their thoughts with an open mind. As a result of this move, Coinbase has said that it won’t launch LEND at least till the end of October and it has also said that such ambiguity from the SEC would only confuse the industry even more.