- Coinbase has announced that it is ditching Coinbase Lend after the SEC’s legal threats
- The agency threatened to sue Coinbase if it launched the platform having refused to engage with the exchange during the development stage
- Coinbase updated their announcement blog post to state that Coinbase Lend was dead
Coinbase has decided to ditch its proposed lending platform, Coinbase Lend, following the well-publicized attention of the Securities and Exchange Commission (SEC). In an update to the blog post of July 29 announcing Coinbase Lend the exchange said that it had “made the difficult decision not to launch the USDC APY program”, something that was on the cards ever since the SEC got involved two weeks ago. Coinbase had initially said that the program would be on hold “until at least October”, but this proved ambitious. The blog post didn’t mention the SEC by name but it did reference the need for “regulatory clarity” which leaves little to the imagination.
SEC Hurdle Insurmountable
Coinbase announced the waitlist for Coinbase Lend in July, but earlier this month the SEC threatened them with a lawsuit if they launched it. Coinbase stated that they had tried to talk to the SEC about Coinbase Lend in the planning stage but they were only met with brick walls and demands for information of waitlist applicants. This revelation led to accusations of hypocrisy, with SEC chair Gary Gensler saying publicly on multiple occasions that he wanted crypto companies to seek permission rather than beg forgiveness, words that don’t seem to have been backed up with actions.
Coinbase Lend May Live On in Another Guise
Having had to choice but to halt its rollout of Coinbase Lend on pain of legal action, Coinbase has now seemingly realized that there was no way they could launch it and not attract the SEC’s ire, so they have decide to ditch it in its current guise. The blog post update did not go into detail, only stating that Coinbase Lend was cancelled and that Coinbase would “not stop looking for ways to bring innovative, trusted programs and products to our customers”, although they will seemingly find that harder than they initially thought.