Coinbase, the crypto exchange run by Brian Armstrong, has scrapped plans to launch a crypto lending product likely because the United Securities and Exchange Commission (SEC) says it violates the country’s securities laws.
Coinbase announced that it will no longer launch its USDC APY program
Coinbase announced in an updated blog post that it will no longer launch the USDC APY program and has discontinued the waiting list for the program. The post states, “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.”
It goes on to say, “We have also discontinued the waitlist for this program as we turn our work to what comes next. We had hundreds of thousands of customers from across the country sign up, and we want to thank you all for your interest. We will not stop looking for ways to bring innovative, trusted programs and products to our customers.”
Armstrong claimed that the SEC did not give a good explanation
Back in June, Coinbase proposed Lend, a product that would allow its users to earn up to 4 percent interest on selected crypto assets. However, the exchange said it had been threatened with a lawsuit by the financial regulator if it went ahead with the plan.
Brian Armstrong claimed that the SEC would not explain why the product was considered a security. However, other commentators, such as Anderson Kill’s lawyer Preston Byrne, claimed that it was clear that such lending products were securities because they were essentially unsecured bonds.
Other crypto lending platforms in the US, such as BlockFi and Celsius, have come under regulatory scrutiny regarding their lending offerings in recent weeks. This includes several cease-and-desist letters from state authorities.