Coinbase CEO Brian Armstrong Lashes Out At the SEC for Confusing Lending With Security
Coinbase CEO Brian Armstrong seems to be absolutely unhappy with the U.S. SEC’s interference in the crypto lending space. In his recent Twitter thread, Armstrong has lashed out at the SEC for confusing crypto lending with a ‘security’.
Over the last few years, crypto yield earnings have gained massive popularity across millions of worldwide crypto investors. The DeFi market rise comes on the backdrop of strong lending activity incentivizing users to earn good returns for their money.
Even big crypto firms like Coinbase have been looking to enter the crypto lending market offering investors 4% APY on USDC. However, the U.S. SEC has been trying to put a spanner-in-the-wheel of crypto lenders.
In his recent thread, Coinbase CEO Brian Armstrong comes out clean on his recent interaction with the SEC. Just as Coinbase was to kickstart the yield earning facility on USD Coin lending, it approached the SEC to inform about it. However, it received a surprising response from the securities regulator.
The SEC told that the lending feature shall be treated as a security. Armstrong further adds:
They refuse to tell us why they think it’s a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why.
Armstrong: SEC Engaging In Intimidation Tactics
With SEC refusing to offer any explanation, the Coinbase CEO said that the regulator is engaging in intimidation tactics behind closed doors. “Whatever their theory is here, it feels like a reach/land grab vs other regulators,” he added.
While other crypto firms in the market continue to offer crypto lending features, Armstrong notes that the SEC isn’t consistent in its behavior. He further noted that any attempt to shut down crypto lending will be harming consumers more than protecting them. The Coinbase CEO added:
“By preventing Coinbase from launching the same thing that other companies already have live, they’re creating an unfair market”.
Armstrong has requested the SEC to provide further clarity and guidance on the matter. They are not willing to take this matter further to the court as “regulation by litigation” should be the last resort, says Armstrong.
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