Coinbase CEO Brian Armstrong says the U.S. Securities and Exchange Commission (SEC) is threatening the crypto exchange with a lawsuit.
The SEC tells Coinbase it will sue if the company launches a new lending product known as Lend, according to Armstrong.
Armstrong says the SEC claims the product, which is designed to allow users to lend and borrow cryptocurrencies by using their holdings as collateral, would count as a security.
“We were planning to go live in a few weeks, so we reached out to the SEC to give them a friendly heads up and briefing.
They responded by telling us this lend feature is a security. Ok – seems strange, how can lending be a security? So we ask the SEC to help us understand and share their view. We always make an effort to work proactively with regulators, and keep an open mind.
They refuse to tell us why they think it’s a security, and instead subpoena