In its decision to withdraw its Lend product from the market after scuffle with SEC, the Coinbase alluded to the difficulty in obtaining regulatory certainty across the cryptocurrency industry.
Coinbase, a cryptocurrency exchange based in the United States, has stated that it will not be continuing with its Lend crypto lending service.
Coinbase explained its decision not to bring the crypto lending product to market in a Sept. 17 update to a blog post that first announced the initiative in June, citing problems in obtaining regulatory certainty throughout the cryptocurrency industry.
Lend is a scheme designed to offer 4 percent yearly yield back on deposits of USD Coin, according to the exchange, which claims that “hundreds of thousands of customers from across the country” have already joined up (USDC).
The announcement comes less than two weeks after the Securities and Exchange Commission, or SEC, threatened Coinbase with legal action if the exchange launched Lend, which the SEC has determined to be a security falling under its jurisdiction. Coinbase has since withdrew the threat.
Chief legal officer Paul Grewal of cryptocurrency exchange Coinbase later stated that the financing product was not a “investment contract or a note,” and that the SEC’s judgment was lacking in specificity. It was previously announced that Lend wouldn’t be launched until “at least October” according to the exchange.
Coinbase continues to be one of the largest cryptocurrency exchanges in the United States and the globe, according to CoinMarketCap, with more than $6.3 billion in daily trade activity in 2017.
Additionally, the exchange announced intentions earlier this month to raise $1.5 billion through a debt issue in order to further strengthen the company’s balance sheet.
