Coinbase’s newly announced Lend program is at a risk of being the main culprits of a potential lawsuit. After a 6 month collaboration with the US Securities and Exchange Commission (SEC), Coinbase was hoping to launch its fixed interest crypto lending services without any issues.
However, SEC will nonetheless sue the exchange for breaching securities laws should Coinbase continue with the expected release of the program.
It was reported that Coinbase had approached the SEC with a programme and framework that outlines the entire project. The exchange also answered all the questions that were asked, and it complied in all other ways that SEC required.
It was in June of this year that Coinbase announced to be opening a wait list for initial customers for the Lend program. It was soon after that that SEC launched an official investigation against the exchange and required written documents as well as a sworn testimony provided by a corporate witness. The exchange was quick to provide all the necessary details.
It is worth mentioning that SEC has never busted any yield programs in the past, however some state regulators have moved against similar projects.
The cryptocurrency environments is not new to lending programs, as in the past many small-scale or large-scale company have been offering similar services. But with Coinbase this will be by far the largest such initiative.