{"id":138105,"date":"2021-09-08T08:21:23","date_gmt":"2021-09-08T08:21:23","guid":{"rendered":"https:\/\/precoinnews.com\/?p=138105"},"modified":"2021-09-08T08:21:23","modified_gmt":"2021-09-08T08:21:23","slug":"sec-plans-to-sue-coinbase-over-crypto-yield-program","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/crypto\/sec-plans-to-sue-coinbase-over-crypto-yield-program\/","title":{"rendered":"SEC Plans to Sue Coinbase over Crypto Yield Program"},"content":{"rendered":"
The US Securities and Exchange Commission (SEC) will sue Coinbase over concerns of breaching the security laws if the crypto exchange launches its yield program.<\/span><\/p>\n In a blog post published on Wednesday, Coinbase\u2019s Chief Legal Officer, Paul Grewal detailed that the regulator sent the exchange a Wells notice, which officially tells a company that it is intending to sue the company.<\/span><\/p>\n According to Coinbase, it is cooperating with the financial market watchdog for nearly six months over the upcoming launch of the Coinbase Lend program, which intends to offer users fixed interest for lending certain cryptocurrencies.<\/span><\/p>\n Lending programs are not new in the cryptocurrency space and multiple other small and large companies are offering such services. \u201cOther crypto companies have had lending products on the market for years, and new lending products continue to launch as recently as last month,\u201d Coinbase pointed out.<\/span><\/p>\n Though the SEC never busted any crypto company for yield programs, multiple state regulators moved against BlockFi for offering similar services.<\/span><\/p>\n 7\/ Look\u2026.we’re committed to following the law. Sometimes the law is unclear. So if the SEC wants to publish guidance, we are also happy to follow that (it’s nice if you actually enforce it evenly across the industry equally btw).<\/p>\n \u2014 Brian Armstrong (@brian_armstrong) September 8, 2021<\/p>\n<\/blockquote>\n Coinbase initially approached the SEC with its framework of the yield program. It also provided additional details and answered all questionnaires of the securities market regulator regarding the program.<\/span><\/p>\n \u201cThe SEC told us they consider Lend to involve a security, but wouldn\u2019t say why or how they\u2019d reached that conclusion,\u201d Grewal said.<\/span><\/p>\n Instead of scrapping the program, Coinbase publicly announced it in June and opened a waitlist to onboard initial customers, all without setting any launch date.<\/span><\/p>\n The SEC then opened a formal investigation against the publically listed crypto exchange and asked for documents and written responses, along with sworn testimony by a corporate witness. Though Coinbase followed all the requirements, it did not provide the details of enrolled waitlist customers.<\/span><\/p>\n \u201cDespite Coinbase keeping Lend off the market and providing detailed information, the SEC still won\u2019t explain why they see a problem. Rather they have now told us that, if we launch Lend, they intend to sue,\u201d Grewal added.<\/span><\/p>\n\n
SEC’s Opaque Investigation<\/span><\/h2>\n