Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

U.S. markets regulator takes aim at Coinbase lending product

ForexSep 09, 2021 02:10
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The logo for Coinbase Global Inc, the biggest U.S. cryptocurrency exchange, is displayed on the Nasdaq MarketSite jumbotron and others at Times Square in New York, U.S., April 14, 2021. REUTERS/Shannon Stapleton/File Photo

WASHINGTON/HONG KONG (Reuters) -The U.S. Securities and Exchange Commission has told Coinbase (NASDAQ:COIN) Global Inc that it plans to sue the cryptocurrency exchange if it goes ahead with plans to launch a programme allowing users to earn interest by lending digital assets, Coinbase said.

The top U.S. markets regulator last week told Coinbase it intends to legally charge the company, Coinbase's chief legal officer, Paul Grewal, said a statement on Tuesday, noting that the firm now plans to delay the launch of its 'Lend' product until at least October.

An SEC spokesperson declined to comment.

In a lengthy Twitter (NYSE:TWTR) thread, Coinbase CEO Brian Armstrong criticized the agency's handling of the firm's plans to roll out a lending product the SEC has determined to be a security and said the agency had denied him a meeting. Both the CEO and chief legal officer said Coinbase disputes the SEC's determination, saying 'Lend' is not an investment contract or note.

The executive's remarks provide a glimpse into the rising tension between the crypto industry and regulators, which have been ratcheting up scrutiny of a world that has so far existed in a regulatory gray area.

Crypto proponents have hoped that Gary Gensler, who became SEC chair in April, would bring clear, broad rules to the industry but so far have been disappointed by the SEC's more watchful gaze.

Gensler is seeking more authority for the agency to oversee a world he described last month as a "Wild West" riddled with fraud and investor risk. He has said some digital assets and platforms are operating as or offering securities, bringing them under the SEC's oversight.

Company executives said they were surprised when the firm received the legal notice after notifying the SEC of plans to move ahead with 'Lend.'

An SEC official said the agency has held meetings with Coinbase representatives.

Programmes that allow owners of cryptocurrencies to lend them in return for interest are becoming more common around the world, but some regulators, particularly in the United States, have started to raise concerns, arguing that such products should comply with existing securities laws.

The U.S. state of New Jersey ordered the cryptocurrency platform BlockFi Inc https://www.reuters.com/legal/transactional/new-jersey-orders-blockfi-cryptocurrency-firm-stop-offering-interest-bearing-2021-07-20 in July to stop offering interest-bearing accounts that have raised $14.7 billion from investors.

"If we end up in court we may finally get the regulatory clarity the SEC refuses to provide. But regulation by litigation should be the last resort for the SEC, not the first," Armstrong said on Twitter.

Shares of Coinbase were down over 2% by 3:10 p.m. EDT (1904 GMT).

U.S. markets regulator takes aim at Coinbase lending product
 

Related Articles

Sterling dips as risk currencies' rally pauses
Sterling dips as risk currencies' rally pauses By Reuters - Oct 21, 2021

LONDON (Reuters) - Sterling dipped below one-month highs on Thursday, tracking a similar move in risk-oriented currencies which lost some momentum against the dollar after a rally...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Jonas Krill
Jonas Krill Sep 08, 2021 12:01
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Scared people may make some money on their money
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email