The Nasdaq-listed cryptocurrency exchange Coinbase has dropped its plan to launch a lending program after the U.S. Securities and Exchange Commission (SEC) threatened to sue the company.
Coinbase announced that it has decided not to launch the Lend program. The exchange wrote:
Our goal is to create great products for our customers and to advance our mission to increase economic freedom in the world. 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 USDC APY program.
“We have also discontinued the waitlist for this program as we turn our work to what comes next. 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 innovatively, trusted programs and products to our customers,” Coinbase added.
Coinbase unveiled the Lend program in June where users could “earn interest on USD coin (USDC) with rates more than 50x the national average of a traditional savings account,” the company explained at the time. The program advertised that users could earn 4% APY and the “principal is guaranteed.”
However, Coinbase revealed in early September that the SEC sent the company a Wells Notice regarding its Lend program. “The SEC has told us it wants to sue us over Lend. We don’t know why,” the exchange said. “The SEC told us they consider Lend to involve a security, but wouldn’t say why or how they’d reached that conclusion.”
Meanwhile, Coinbase is growing its business in some other ways. Last week, the company filed an application with the National Futures Association (NFA) to offer futures and derivatives trading on its platform. Coinbase is also raising $2 billion by selling bonds. Furthermore, the exchange announced Monday that Coinbase Prime, a comprehensive platform for institutional investors, is launching with updated capabilities.