The US Securities and Exchange Commission (SEC) has threatened US-based crypto exchange Coinbase with lawsuits for launching the lending service Lend, Coinbase CEO Brian Armstrong has said.
According to him, representatives of the exchange contacted the SEC to notify the regulator of the launch of the new product. The commission has classified the lending service's loans as unregistered securities. The SEC has demanded additional documents and testimony from the platform's employees.
Armstrong has stressed the SEC refuses to substantiate its view:
"They refuse to tell us why they think it's a security, and instead subpoena a bunch of records from us (we comply)."
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If the case ends up going to court, the cryptocurrency sector could finally get regulatory clarity that the SEC refuses to provide, Armstrong has said. In his view, regulating the sector through litigation should be the last resort for the SEC, not the first.
It has recently become known that the SEC has launched an investigation into Uniswap Labs, the operator of one of the world's largest decentralized cryptocurrency exchanges.