SEC Considers Coinbase’s Crypto Yield Program As A Security. Brian Armstrong Responds

The US SEC has threatened to sue Coinbase over its crypto yield program, tagging it as a security.

SEC Considers Coinbase’s Yield Program As a Security

The CEO of Coinbase, Brian Armstrong, revealed earlier today that the cryptocurrency exchange had come under fire from the United States Securities and Exchange Commission (SEC). According to Armstrong, the regulatory agency had threatened to sue the cryptocurrency exchange for its yield program.

The SEC considers the yield program to be a security and that Coinbase didn’t register with the agency before launching it. However, Armstrong said the regulatory agency didn’t tell the exchange why the program was a security and didn’t clarify any existing guideline for Coinbase to follow regarding its crypto yield program.

6/ They refuse to tell us why they think it's a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why.

— Brian Armstrong (@brian_armstrong) September 8, 2021

 

He added that the crypto exchange informed the US SEC earlier this year about the expected launch of its Coinbase Lend program that intends to offer users 4% annual yield returns on deposits made with the USDC stablecoin.

The Coinbase CEO pointed out that there are numerous cryptocurrency trading platforms that currently offer similar lending services to their customers. He, therefore, urged the SEC to provide regulatory clarity on the issue to ensure that market players provide the services in accordance with the law.

He added that Coinbase is committed to following the law. However, Armstrong lamented that sometimes, the law is unclear. Hence, if the SEC wants to publish guidance, Coinbase would be happy to follow it and tailor its products in line with the regulatory requirements.

Cryptocurrency Market Loses Over $300 Billion In 24 Hours

The cryptocurrency market recorded massive losses over the past 24 hours. Yesterday, the total crypto market cap was close to $2.4 trillion. However, the market correction yesterday saw the market cap drop to the $2 trillion mark, resulting in a loss of over $300 billion in the last 24 hours.

Bitcoin’s price is down by nearly 9% since yesterday. BTC was trading above $52k yesterday but has since lost a large chunk of its value and is now trading at $46k per coin. Ether is also down by over 10% and is trading around the $3,400 region.