The US Securities and Exchange Commission continues exerting pressure on cryptocurrencies. Earlier, the SEC promoted the idea to introduce a tax on cryptocurrency transactions. Now, the organization is attempting to prevent the launch of the crypto lending program called Lend, announced by Coinbase.
The regulator supposes that the launch of the Lend program may lead to the illegal circulation of securities. Once Coinbase announced its plans, experts at the SEC examined additional documentation and took testimony from employees. As a result, they concluded that the Lend program is security. The SEC’s warning is a strong reason to delay the launch of the program until at least October. Notably, the new service would allow customers to earn 4% interest on their cryptocurrency holdings by lending tokens. The service would find borrowers by itself. However, Coinbase received a Wells notice, a letter sent by the SEC, reading that the product is considered a security that should be registered with the government. “They [SEC] are refusing to offer any opinion in writing to the industry on what should be allowed and why, and instead are engaging in intimidation tactics behind closed doors,” Brian Armstrong, Coinbase’s chief executive wrote. “Whatever their theory is here, it feels like a reach/land grab vs other regulators.” Meanwhile, traders condemn the regulator for applying such measures. They worry that new rules may limit the trade freedom in the industry that is viewed as its main advantage.
