Crypto lending products have come under scrutiny from security regulators in some jurisdictions across the United States. While these enforcement actions have come from agencies at the state level, there have been indications that the Securities and Exchange Commission (SEC) was also set to go on the offensive.
Thus, it was perhaps unsurprising to see the SEC ask Coinbase to halt its proposed crypto lending program titled “Lend.” Coinbase CEO Brian Armstrong took to Twitter to express dissatisfaction with the SEC’s behavior, stating that the Commission was not forthcoming with useful guidance despite public assurances to the contrary.
Critics of the SEC’s enforcement actions directed at the U.S. crypto space warn that America risks falling behind in the emerging digital economy if suitable regulatory sandboxes are not created. However, the SEC has maintained that the size and growth potential of the cryptocurrency space makes it necessary for the industry to operate within the ambit of existing laws and guidelines.
Lending is a