US-based crypto exchange Coinbase has abandoned plans for its DeFi-based product named Lend. Citing regulatory hassles from the US SEC, Coinbase declared that the product, which was scheduled for launch this month, will no longer be released.
The US Securities and Exchange Commission has been hot on the heels of Coinbase, starting with a stern warning in which it advised the exchange not to release the Lend product. In a tweet issued earlier this month, Coinbase CEO Brian Armstrong alleged that the regulator had not given a concrete explanation in its warning letter.
US SEC Dashes Hopes of Users Anticipating Lending Program
Coinbase’s Lend product had received many sign-ups from anticipating users who would have been entitled to 4% interest on stablecoin USDC deposits if it launched. The Lend product is reckoned as part of the exchange’s plans to catch up with the DeFi wave that is almost nearing its tipping point.
According to reports, the U.S. SEC had threatened to initiate legal action against Coinbase if it went ahead to launch the DeFi product. At the time, the crypto exchange announced that it had shelved the September launch to next month pending a satisfactory explanation from the US SEC. However, there will be no October launch either since the Lend product has been scrapped.
Coinbase’s CLO Says Lending Product Not Investment Note
Based on speculations, the US regulator might have considered the Lend product as a security just like it has with the XRP token. But Coinbase’s Chief Legal Officer, Paul Grewal in the exchange’s defence declared that the product is not an investment note or contract.
Most crypto firms and businesses have had it up to the neck with the regulatory pressure from the US SEC. Currently, Ripple is facing a legal battle from the regulator who has accused the former of selling unregistered securities valued at $1.3 billion in 2013. Ripple’s lawsuit has lasted for a year now. Meanwhile, the US SEC has been actively involved in the crypto sector as it aims to regulate activities.
