Coinbase Abandons its Plan to Launch a Lending Product Due to SEC Pressure

Kavya  |  Sep 21, 2021

Coinbase, the largest cryptocurrency exchange in the United States revealed its intention to abandon its plan to launch a lending product on Monday under the pressure of the US SEC.

Coinbase Abandons Its Plan To Launch A Lending Product Under The Pressure of SEC

This discussion comes after Coinbase openly discussed the US Securities and Exchange Committee (SEC) threatening to sue the exchange if it goes forward with this lending program. 

“ As we continue our efforts to obtain regulatory clearance for the crypto sector as a whole, we've made the tough choice not to launch,” the business stated in a modest post on Sept. 17.

“We had hundreds of thousands of consumers sign up from throughout the country, and we want to thank you all for your interest. We will not stop exploring new ways to provide our consumers with innovative, trustworthy programs and products.”

Coinbase CEO Brian Armstrong recently spoke about the SEC’s “very shady behavior”  claimed that the government has been requesting the name and contact information of every single individual on their Lend queue. 

At the time, Coinbase stated that the launch has been postponed until October because of getting Wells Notice. These ideas, however, have now been abandoned. 

Coinbase Analytics, the company's blockchain tracing software, has also landed a $1.4 million agreement with Homeland Security.

Tagomi Acquired, Increasing The Company’s Institutional Product Suite

Coinbase also said on Monday that its Prime cryptocurrency brokerage will be available to all 9,000 of its institutional investors, which include hedge funds and family offices.

In May of last year, the exchange purchased Tagomi to begin delivering Prime brokerage services to its institutional clients.

Coinbase's vice president of institutional products, Greg Tusar, stated in a blog post that Meitu, MicroStrategy, and One River utilize the exchange's "complete platform to conduct some of the industry's biggest deals."

The publicly listed business, whose clients include Tesla CEO Elon Musk, SpaceX, Tesla, PNC Bank, Third Point LLC, and WisdomTree Investments saw institutional trading activity account for 69% of its $462 billion trading volume in the second quarter.

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