SEC threatens to sue Coinbase for cryptocurrency program

HONG KONG, Sept. 8 (Reuters) – The U.S. Securities and Exchange Commission (SEC) has threatened to sue Coinbase Global Inc (COIN.O) if cryptocurrency exchange continues with plans to launch a program that allows users get interest by lending cryptocurrencies. assets, Coinbase said Wednesday.

The SEC has issued Coinbase with a notice from Wells, an official way that indicates a company intends to sue the company in court, said Paul Grewal, the company’s legal manager in a blog post. He said Coinbase would delay the launch of its “Lend” product until at least October as a result.

Coinbase shares fell about 2.5%, to $ 260 at 0845 GMT, in pre-market trading on Wednesday.

Programs that allow cryptocurrency owners to lend to them in exchange for interest are becoming more common around the world, but some regulators, particularly in the United States, have begun to raise concerns, arguing that these products should comply. existing securities laws.

The U.S. state of New Jersey ordered in July the cryptocurrency platform BlockFi Inc. to stop offering interest-bearing accounts that have raised $ 14.7 billion from investors.

Grewal said on his blog that the SEC’s concerns about the Coinbase loan were related to the fact that the regulator believed the product involved security. Grewal said Coinbase believes that was not the case.

The SEC did not respond to a request for comments by email outside of customer service hours.

Alun John reports in Hong Kong and Kanishka Singh in Bengaluru; Edition by Ana Nicolaci da Costa

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