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Coinbase CEO responds to SEC oversight: SEC declined to explain or meet

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After the SEC insisted that Coinbase's C2C lending service was a security, Coinbase's CEO tweeted a complaint

Coinbase CEO defends SEC lawsuit over Lending Business

Source: Twitter

Deep chain Finance

Investors who experienced last night's plunge in the cryptocurrency market were shaken on Sept. 8, according to Coinbase'S CEO. Brian Armstrong sent out an unprecedented 21 tweets publicly teasing/mocking the SEC.

Brian Armstrong Said the company plans to launch a C2C lending service in a few weeks that allows users to lend their money in return, but the SEC said it was a security and said it would Sue Coinbase if it started the service, without explanation...

Brian Armstrong:

Some of the recent actions of the Securities and Exchange Commission have not been very chivalrous. This is story time.

Over the past few years, millions of cryptocurrency holders have been earning income on their assets. There's nothing wrong with that - if you lend money, you earn a return. Everyone is happy.

A group of great companies in the crypto space have been offering this kind of service for years. Coinbase only recently came out and said: We're going to launch our own version.

We were planning to launch a USDC loan product in a few weeks, so we contacted the SEC and had a friendly and ventilated meeting with them.

They replied that the loan product was a security... Well, it seems strange, but how can a loan product be a security? Therefore, we asked the SEC to share their views to help us understand. We always try to work actively with regulators and keep an open mind.

They refused to tell us why they thought it was a security. Instead, they subpoenaed us (we complied), asked our employees to testify (we complied), and then told us they would Sue us if we went ahead with launching the product, without explaining why.

Look at... We are committed to complying with the law. Sometimes the law is unclear. So if the SEC wants to issue guidance, we're happy to do so. (It would be great if you could actually implement this guideline equally across the industry.)

But in this case, they refused to provide written advice to industry on what should be allowed and why, instead shutting the door and engaging in a policy of intimidation. Whatever their theory, it feels like a turf war with other regulators for power.

Many other crypto companies could continue to offer lending capabilities, but Coinbase was not approved.

If you don't want this kind of activity, just say so in writing and enforce it equally across the industry.

On the surface, the SEC's goal is to protect investors and create fair markets. So who are they protecting here, and where is the harm? People seem happy to make money on these different products, and it's the same for other crypto companies.

Shutting down such services would undoubtedly hurt consumers, not protect them. By preventing Coinbase from launching the same product that other companies already have, the SEC is creating an unfair market.

In May, I traveled to Washington, D.C., to meet with every regulator and government agency I could.

The SEC was the only regulator to refuse to meet with me, saying, "We will not meet with any crypto company." And this happened right after we became the first crypto company to go public in the United States.

SEC Chairman Gary Gensler confirmed this a month ago. I thought the SEC had been dealing with it, but NOW I'm not so sure.

We've always tried to be fun in this space -- we tend to embrace regulation even when enforcement is difficult and expensive. Before we launch a product, we all think about what we want and what we want our families to be aware of the risks.

We will continue to follow this approach.

Here, however, we are being threatened with enforcement action before the industry has received any practical guidance on these products.

If we end up in court, we might get what the SEC has so far refused to provide -- clear regulatory guidance. But litigation should be the SEC's last resort, not its first.

Our door is still open. Hopefully, the SEC will step up and give the industry the regulatory clarity it deserves without harming consumers and companies. The United States can really work together now to figure that out.