Pressure from the Securities Exchange Commission (SEC) has led Coinbase to cancel its Lend product per the announcement on Tuesday.
The SEC has reacted to a breach in securities law from Coinbase, the crypto exchange led by Brian Armstrong, which is what drove the decision to ultimately cancel the launch of the crypto lending product.
In a post on the Coinbase Blog, it was confirmed that the crypto lending product is discontinued along with the waitlist.
The confirmation statement of Coinbase is the following:
“As we continue our work to seek regulatory clarity for the crypto industry as a whole, we’ve made the difficult decision not to launch the USDC APY program.”
The blog post also promised that even though the wishlist was discontinued along with the lending product, they will continue to provide innovative products and services for their customers as they embark on yet another quest for improvement.
Coinbase suggested the Lend product in June, which would allow users to earn up to 4% interest on chosen crypto assets. The exchange, on the other hand, claimed that it had been threatened with a lawsuit by the financial authority if it went ahead with the project.
Brain Armstrong did not stay silent over the SEC fiasco by pointing out that Gary Gensler refused to comment on the question of the product being regarded as a security.
Armstrong argued that “they refuse to tell us why they think it’s a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why.”
We have yet to see the take of SEC on the allegations against Coinbase when an official statement is made.