Cryptocurrency, News

CoinBase Cancels Proposed Lending Program after SEC Scrutiny

As we posted last week, CoinBase’s proposed lending program, where its customers would be able to use cryptocurrency to make loans to third parties raised objections from the SEC. Coinbase objected to the objections in a public statement, claiming it didn’t know what the problem was.

There isn’t much public information available about the program, but as we dug in a bit it certainly appeared that the proposed program would be a security, which would require registration with the SEC, or compliance with an exemption. Our examination of the issue is at CoinBase Plan May Be a Security

Well, apparently CoinBase has figured out what the SEC’s issue is, or simply decided that the cost of registration, or of the fight with the SEC wasn’t worth the benefit. Yesterday they announced the cancellation of the proposed LEND program.

From their website:

Our goal is to create great products for our customers and to advance our mission to increase economic freedom in the world. As we continue our work to seek regulatory clarity for the crypto industry as a whole, we’ve made the difficult decision not to launch the USDC APY program announced below. We have also discontinued the waitlist for this program as we turn our work to what comes next. We had hundreds of thousands of customers from across the country sign up and we want to thank you all for your interest. We will not stop looking for ways to bring innovative, trusted programs and products to our customers.

The Securities Lawyer