The SEC insisted that Coinbase’s C2C lending service is a security, but did not provide any explanation.
Original title: ” Lending business may be sued, Coinbase CEO publicly choked on SEC “
Written by: Brian Armstrong, Co-founder and CEO of Coinbase Translation: Deep Chain Finance
On September 8th, investors who experienced the sharp drop in the cryptocurrency market last night were shocked. Here, Coinbase CEO Brian Armstrong posted 21 tweets on an unprecedented scale, publicly complaining about the SEC (US Securities and Exchange Commission).
Brian Armstrong said that the company plans to launch a C2C lending and wealth management service in which users lend money in return within a few weeks, but the SEC stated that this is a type of security and that if Coinbase launches this service, it will prosecute it and did not do anything. Any explanation…
The following is what Brian Armstrong said:
Some recent actions of the US Securities and Exchange Commission (SEC) are not very moralistic. The following is the story time.
In the past few years, millions of cryptocurrency holders have been earning income for their assets. This is fine-if you lend money, you can make a return. Everyone is very happy.
A group of great companies in the encryption field have been providing this type of service for many years. Coinbase has only recently stepped up and said: We will launch our own version.
At that time, we planned to launch USDC lending products within a few weeks, so we contacted the SEC and had a friendly talk with them.
They replied that this loan product is a security… well, it seems strange, how can a loan product become a security? Therefore, we ask the SEC to share their views to help us understand. We always strive to actively cooperate with regulatory agencies and maintain an open mind.
They refused to tell us why they thought it was a security. Instead, it summons us (we comply), asks for our employee work permits (we comply), and then tells us that if we continue to launch this product, they will sue us without explaining why.
Look…We are committed to complying with the law. Sometimes the law is unclear. Therefore, if the SEC wants to issue guidelines, we are happy to do so. (If you can actually implement this guideline equally across the industry, that would be great.)
But in this case, they refused to provide written advice to the industry on what should be allowed and why, instead they closed the door and implemented a policy of intimidation. No matter what their theory is, it feels like they are competing for territory and power with other regulatory agencies.
Many other crypto companies can continue to provide loan functions, but Coinbase has not been approved.
If you do not want this kind of activity, you only need to make a written statement and implement it equally across the industry.
On the surface, the SEC’s goal is to protect investors and create a fair market. So, who are they protecting here, and where is the so-called harm? People seem to be happy to make money on these different products, and this is the same for other crypto companies.
Shutting down such services will undoubtedly harm consumers, not protect consumers. By preventing Coinbase from launching the same products that other companies already own, the SEC is creating an unfair market.
In May of this year, I traveled to Washington, D.C., to do my best to meet with every regulatory agency and government department.
The SEC is the only regulatory agency that refuses to meet with me, stating that “we will not meet with any crypto company.” And this happened after we became the first listed crypto company in the United States.
SEC Chairman Gary Gensler confirmed it a month ago. I thought the SEC had been dealing with this matter, but now I am not so sure.
We have been trying to be a good player in this field-even if the implementation is difficult and costly, we tend to embrace regulation. Before launching a product, we all think about what we want and what risks we want our family to realize.
We will continue to follow this approach.
However, here, we are being threatened by law enforcement actions before the industry has received any actual guidance on these products.
If we finally appear in court, we may be able to get the clear regulatory guidelines that the SEC has consistently refused to provide. But litigation should be the last resort of the SEC, not the first resort.
Our door is still open. It is hoped that the SEC can step forward and provide the regulatory clarity that this industry deserves without harming the interests of consumers and companies. The United States really can now, work together to figure this out.
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