The leading crypto exchange in the United State, Coinbase, has recently announced that they will not be launching their new crypto lending services in the nation. The crypto exchange has abandoned its pursuit of the new lending program following a notice from the United States Securities and Exchange Commission.
While Coinbase did not openly mention it to the general public, the exchange has been facing difficulties from regulatory agencies for quite some time now. Even though Coinbase has been registered with the top regulators in the United States, and has been collaborating with the likes of the Department of Homeland Security, the exchange has gone back on its crypto lending program in the market.
The exchange has been planning on launching its crypto lending product in the United States and sought the consent of the SEC for launching the new product with the aim of expanding its range of crypto series in the United States.
The lending program was met with positive views from crypto enthusiasts even though the program had not been launched. According to the crypto exchange, thousands of customers from across the United States had already signed up for the program, which offered annual yield returns on USD Coin deposits 4%.
On September 17, Coinbase stated that they would not be going forward with the lending program, hinting at regulatory clarity issues in the nation. The announcement was made less than 15 days after the SEC had responded to the exchange and threatened to take legal action if the lending product was launched. The SEC claimed that the new product is identified as a security under the agency’s purview, as such the exchange is not permitted to follow through with its plan.
Paul Grewal, Coinbase’s legal officer, responded by questioning the SEC’s claims. He made it clear that the product was neither an investment contract nor a note, and that the SEC’S decision lacked clarification. At the time, Coinbase stated that it would be pushing the launch date until October.
Despite receiving threats from the SEC, and facing regulatory concerns, Coinbase is still the largest crypto exchange. In a recent report, the exchange has made more than $6.3 billion in daily trading volumes. Earlier in September, the leading exchange had announced their plans to raise $1.5 billion in debt offering to grow the company’s balance sheet.