Compliance
Compliance Corner: SEC, Coinbase - Report

The latest compliance news: regulatory developments, punishments, guidance, permissions and new product and service offerings.
Securities and Exchange Commission, Coinbase
Digital assets platform Coinbase Global
reportedly will not offer a lending program that drew the threat
of enforcement action from US regulators, the Wall Street
Journal reported yesterday.
The product would have allowed customers holding a digital token
called USD Coin to earn interest by lending it to other
cryptocurrency traders. But the Securities and Exchange
Commission told the company it couldn’t do so without registering
the activity under investor-protection laws, Coinbase reportedly
disclosed earlier this month (Wall Street Journal,
September 20).
The report quoted Coinbase chief executive Brian Armstrong as
saying in social-media messages at the time that the SEC
threatened to sue over the product launch. He called the SEC’s
position and tactics “sketchy” and wrote that litigation with the
agency might yield “the regulatory clarity the SEC refuses to
provide.” The regulator didn’t adequately explain why the product
would qualify as an asset overseen by securities regulators, he
said.
A SEC spokesman declined to comment on Mr. Armstrong’s
allegations earlier this month and again yesterday, the report
said.
The report highlights how digital assets firms, such as those
involved with bitcoin and other entities, have been at odds with
regulators in the US and overseas over certain products.