The US Securities and Exchange Commission (SEC) is suing Coinbase Global if a cryptocurrency exchange continues with plans to launch a program that allows users to earn interest by lending crypto-assets, Coinbase said Wednesday.
According to ArabiaNet, the Securities and Exchange Commission has issued a notice to Coinbase, which is an official way for Coinbase's Securities Commission to tell the company that it intends to sue it in court, he said. Paul Grewal, the company's chief legal officer, blogs. He said Coinbase will delay the launch of its Lend product until at least October as a result.
Coinbase shares fell about 2.5 percent to $260 by 0845 GMT in pre-market trading on Wednesday, according to Reuters and seen by Al Arabiya.net. .
Programs that allow cryptocurrency holders to lend them at interest are becoming more common around the world, but some regulators, particularly in the US, are starting to raise concerns, Arguing that such products must comply with current securities laws.
The US state of New Jersey ordered cryptocurrency platform BlockFi Inc in July to stop offering interest-bearing accounts that raised $14.7 billion from investors.
Grewal said on his blog that the SEC's concerns about Coinbase's Lend product were related to the fact that the regulator believed the product contained securities. Which was denied by Grewal.
