The US Securities and Exchange Commission (SEC) has threatened Bitcoin exchange Coinbase with a lawsuit for launching crypto-savings accounts based on USD Coin (USDC) at 4% per annum because the regulator considers them as “securities.”
The Lend service, which was announced by Coinbase in June, offers higher interest rates than those offered by traditional banks. As a substitute for the FDIC guarantee on such accounts, the exchange offered a “peace of mind” guarantee.
According to the platform lawyer Paul Grewal, Coinbase has been actively engaging with the SEC on the Lend product over the past six months. Last week, the regulator warned of prosecution in case of launching crypto-saving accounts.
The top manager drew attention to the fact similar products have been on the market for many years, some of them appeared in August. Coinbase decided to get regulatory approval and postpone the launch.
The lawyer explained the interpretation of Lend as a “security” is erroneous. Coinbase customers will not “invest” in the program, but rather act as lenders through the USDC placed on the platform.