Coinbase Yields to SEC Pressure, Exchange Drops Its Plan to Launch its Lending Product
On Monday, the biggest cryptocurrency exchange in the US, Coinbase, announced its plans to drop its lending program.
This decision comes after Coinbase publicly discussed the US Securities and Exchange Commission (SEC) threatening to sue the exchange if it goes ahead with this Lend product.
“As we continue our work to seek regulatory clarity for the crypto industry as a whole, we’ve made the difficult decision not to launch,” the firm said in its quiet post on Sept. 17.
“We had hundreds of thousands of customers from across the country sign up and we want to thank you all for your interest. We will not stop looking for ways to bring innovative, trusted programs and products to our customers.”
Just about two weeks back, Coinbase CEO Brian Armstrong had talked about the “really sketchy behavior” from the SEC and that the agency has been asking for the name and contact information of every single person on their Lend waitlist.
At the time, Coinbase had said due to receiving a Wells Notice; they had delayed the launch to at least until October. But now, they have completely shelved these plans.
As we reported this week, the company also signed a $1.4 million deal with Homeland Security for its blockchain tracing software, Coinbase Analytics.
Coinbase also announced on Monday that it is opening its Prime crypto brokerage to all 9,000 of its institutional investors that include hedge funds and family offices.
Last year in May, the exchange acquired Tagomi to start offering Prime brokerage services to its institutional clients.
In its blog post, Coinbase’s vice president of institutional products Greg Tusar noted that Meitu, MicroStrategy, and One River use the exchange’s “comprehensive platform to execute some of the largest trades in the industry.”
The publicly traded company that counts Tesla CEO Elon Musk, SpaceX, Tesla, PNC Bank, Third Point LLC, and WisdomTree Investments as its clients saw 69% of its $462 billion trading volume in the quarter second coming from institutions.