The SEC had recently issued Coinbase along with aWells notice. Officially SEC tells the company that it will sue Coinbase to court. As the chief legal officer of SEC Paul Grewal, Coinbase would delay the launch of its Lend product until October as a consequence.
The US Securities and Exchange Commission or SEC has offered a threat to sue Coinbase Global Inc in case the crypto exchange goes ahead along with its plans of launching a program that allows users to earn interest with crypto-asset lending.
SEC has already issued a Wells notice for Coinbase. It is an official notice from the company which tends to sue the exchange to court.
This news came to the surface when Paul Grewal, the chief legal officer of the company, mentioned it in a blog post. He said that Coinbase would try to delay the launching of its ‘Lend’ product since they are facing such problems.
Programs that enable owners of cryptos to lend them a return for interest have become quite common around the globe. However, some regulators, especially in the USA, are raising concerns over this issue. According to them, such products must comply with the existing laws for securities.
The US state of New Jersey has ordered the crypto platform BlockFi Inc in July to stop its offering of interest-bearing crypto accounts, which have already raised $14.7 billion from its investors.
Grewal said that the concerns of SEC over the ‘Lend’ of Coinbase are related to the fact that the regulator believed this product involved some security. But Coinbase felt that was not the case. SEC has not yet responded to an emailed request for commenting on this matter. Now it is about to watch what steps the SEC will take on this matter and how Coinbase deals along with it.