Coinbase CEO expresses concerns at treatment by SEC over long Twitter thread
The US Securities and Exchange Commission has warned Coinbase (NASDAQ:COIN) that it could face a legal challenge if it launches its proposed digital asset lending service.
Additionally, the regulator issued subpoenas to the crypto exchange seeking additional information.
In a detailed Twitter thread Coinbase CEO divulged his view on Coinbase’s actions while setting out the stool for his company in terms of its stance.
“They are refusing to offer any opinion in writing to the industry on what should be allowed and why, and instead are engaging in intimidation tactics behind closed doors,” he wrote. “Whatever their theory is here, it feels like a reach/land grab vs other regulators.”
The tool in question, by the name of Lend, is constructed to allow Coinbase customers to earn interest on specific digital assets.
Paul Grewal, Coinbase’s chief legal officer, said it categorised the Lend product a security “but wouldn’t say why or how they’d reached that conclusion”.
The Nasdaq-listed crypto exchange announced back in June that it would be launching the product.
The SEC reacted by opening an investigation into the exchange and issuing it with subpoenas, Grewal said.
“Despite Coinbase keeping Lend off the market and providing detailed information, the SEC still won’t explain why they see a problem,” Grewal said. “Rather they have now told us that if we launch Lend they intend to sue.”
The Coinbase share price closed down by 4.18% on Tuesday.