Coinbase CEO Brian Armstrong posted a thread of messages on Twitter. He shared with subscribers that the Securities and Exchange Commission (SEC) threatened to sue the exchange. The reason for the possible trial was a new service that the platform was planning to launch.
Armstrong explained that Coinbase was going to launch a new product in a few weeks. It would allow investors to earn interest on selected digital assets. By contacting the SEC, representatives of the exchange learned that this offer would be classified as an unregistered security. At the same time, the regulatory body refused to explain on what basis that conclusion was made.
The SEC requested a package of documents from Coinbase and also demanded the exchange’s employees testimony. According to Armstrong, they complied with all the conditions, but the SEC maintained that it would sue the exchange if it launched the new function. At the same time, no explanation for that was provided.
In his blog, Coinbase chief legal officer Paul Grewal informed that the exchange had received a Wells Notice from the SEC, a letter that notifies of the substance of the charges that the regulator intends to bring against the respondent.
Armstrong is sure that the Securities and Exchange Commission is biased against his company, as many crypto exchanges have been offering their own lending functions for years. Why can’t Coinbase?
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