Coinbase Launches Crypto Loans – SEC Says No

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Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
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Coinbase, the highly popular crypto exchange run by flamboyant CEO Brian Armstrong, wanted to get into the market of loans, a highly lucrative part of the financial sector in the US. However, the Securities and Exchange Commission immediately pushed back and warned Coinbase they would launch an investigation into the product as soon as it went live.

Brian Armstrong appears to want to avoid a legal standoff with the Commission and is now abandoning the launch of its Lend loan program. For the SEC, the latter is a security and is therefore not allowed under current crypto rules.

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Backtrack following SEC threats

Already on 17 September, 2021, Coinbase informed its clientele that it would finally start its Lend loan program, after it had announced the product in June already.

It is now abandoning this as Coinbase received threats of legal action from the SEC on if the exchange would launch Lend. The SEC considers the latter as a security that falls under its jurisdiction.

Brian Armstrong, the CEO of Coinbase had expressed in a tweet thread his surprise and his dissatisfaction with the letter from the SEC.

In particular, he laments the uncooperative attitude of the SEC, refusing, according to him, to respond to Coinbase’s requests for clarification as to whether Lend is a security.

Another chapter in the long war between crypto and the world of classic finance has resulted in a win for the latter apparently.

rafapress / Depostiphotos.com