The Securities and Exchange Commission (SEC) reportedly threatened the crypto exchange platform, Coinbase through a tweet uploaded by its founder, Brian Armstrong just now.
1/ Some really sketchy behavior coming out of the SEC recently.
Story time
- Brian Armstrong (@brian_armstrong) September 8, 2021
It is understood that Coinbase will launch its latest program, ‘Lend’ which offers an annual yield of 4% through a stablecoin loan, USDC and is expected to be launched in a few weeks.
But what is inviting Coinbase's emotions at the moment, after 6 months of discussions with the SEC, is that the agency suddenly issued a Wells Notice.
For information, a Wells Notice or official letter is an announcement that action will be taken against a company or employee.
The SEC claimed Coinbase's latest program was a security and threatened to sue the exchange if Lend went ahead.
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
The situation became increasingly murky when Coinbase demanded an explanation, the SEC did not want to elaborate further. Instead, the agency demanded some important records and obtained testimonials from Coinbase employees.
According to Armstrong, several crypto firms that also offer similar programs have asked the SEC to provide clarification on the issue.
If it’s true like what Armstrong claimed in his tweet, it’s bad news for BlockFi and Celsius who from the beginning have been offering crypto products.
There is currently no comment from the SEC regarding the Coinbase founder’s allegations.
