Here’s Why The SEC Doesn’t Allow Coinbase To Launch Lending Products
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Answer Here’s Why The SEC Doesn’t Allow Coinbase To Launch Lending Products
we touched In a previous article on Bitcoin Arabs that the SEC threatened “Coinbase” due to preparations for the launch of a high-interest product.
suggest Mr. Evan Van Ness, founder of WeekInEthereumNews, said that the US regulator may have rationale in this regard.
According to Van Ness, the reason for the SEC’s recent behavior and decision may be related to rumors that the agency is going after BlockFi, which operates as an unlicensed hedge fund and also offers high-interest lending products.
Snark aside, here’s a thread on how the SEC isn’t actually _that_ inconsequential in telling Coinbase not to launch their “Lend” product
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– Evan Van Ness 🦇🔊 (@evan_van_ness) September 8, 2021
On Twitter, the CEO of Coinbase revealed his company’s communication process with the Securities and Exchange Commission regarding a new lending product that the company plans to launch later this year.
He added that he did not understand the SEC’s latest move towards his company and that the SEC’s move was not clear about the legal guidelines.
According to Mr. Evan Van Ness, the SEC, in its pursuit of BlockFi, cannot reveal the real reason why Coinbase is also restricted in the DeFi industry.
According to Coinbase, the SEC also required the company to disclose all potential customer data in order to operate legally in the country.
So Coinbase will have to put in place a mandatory KYC procedure for all of its users on current and future platforms and products.
BlockFi is also a financial services company that develops various cryptocurrency investment solutions for private investors such as interest-bearing accounts and crypto-backed dollar loans.
According to the company’s website, BlockFi is looking to work with US regulators and laws.
Read:Tether launches a stable digital currency backed by gold!
But most likely, according to Evan, commissioners are still behaving like regulators unwilling to understand what and why they tax or prohibit.
Previously, the Securities and Exchange Commission (SEC) linked centralized lending and perpetual futures with unreasonably high leverage options to the DeFi industry, clearly demonstrating the uncertainty around industry regulation.
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