United States:
Coinbase Cancels Launch Of Crypto Lending Program
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Coinbase canceled the launch of a program that
would have allowed customers to earn interest by lending USD Coin,
a dollar-based stablecoin created by the company, to Coinbase.
Coinbase’s decision follows the reported threat by the SEC to
bring an enforcement action (see previous coverage) should Coinbase follow
through with the launch. Coinbase also clarified that it ended its
waitlist for the program.
Commentary
The Coinbase program was clearly the offering of a
Coinbase debt security to retail investors without
registration under the Securities Act. While the SEC may not have
been as transparent as it should have in the reasoning
for its determination that the program involved securities, the
legal status of the program was not really a close call
(see prior commentary). Thus, creators of digital
asset products should not assume, based on this case, that the SEC
will necessarily deem their products to be securities. While
there is little doubt of SEC Chair Gary Gensler’s general
skepticism of digital assets, this event is not as significant
as the publicity surrounding it makes it out to be.
Primary Sources
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