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The SEC has threatened a lawsuit against Coinbase for "mystery" crypto lending service

 

The most well-known cryptocurrency exchange The Securities and Exchange Commission (SEC) of the United States has threatened Coinbase with legal action in connection with its plans to launch a lending service on its platform.

The SEC issued Coinbase a Wells notice, which is an official mechanism for the government to notify a company that it intends to sue them. Coinbase responded by agreeing to temporarily suspend its Lend product.

“Despite Coinbase removing Lend from the market and providing extensive information,” Mr. Grewal continued, “the SEC has yet to explain why they believe there is a problem.”

“Instead, they've told us that if we launch Lend, they'll sue us. We requested that the SEC provide us with an explanation, but they refused. Mystery and uncertainty only serve to suffocate innovative products that customers want and Coinbase wants.

Mr. Grewal stated that Lend would be suspended until “at least October” while the company worked to resolve the issues. The SEC did not respond to a comment request. With its initial public offering in April, Coinbase became the first cryptocurrency exchange to become a publicly-traded company.

Coinbase is a critical component of the crypto ecosystem, serving as a barometer for the increasing mainstream adoption of bitcoin and cryptocurrency in the coming years.

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