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Coinbase Accuses the SEC of ‘Using Intimidation Tactics’
Earlier today, Pro-XRP Attorney James Filan tweeted that the SEC “will stop at nothing” to have authority over the crypto space. In the tweet, he revealed that Coinbase believes the SEC is unlawfully stalling the launch of the exchange’s crypto lending program. More crypto enthusiasts have made their stance against the SEC’s ‘intimidation tactics.’
Coinbase’s chief legal officer, Paul Grewal, wrote in a blog post that the regulatory agency threatened to sue the company if it launched the feature. Subsequently, Coinbase’s CEO Brian Armstrong lamented on Tuesday evening, saying that the SEC is not specific on what it wants. As a result, he noted that the firm will delay the launch of its crypto yield product until at least October.
The SEC Proceeds on the Offensive
Coinbase’s CEO told the SEC about its new lending feature as a courtesy. However, the platform didn’t expect such treatment since similar features exist on other platforms. Coinbase intends to compete with other famous decentralized finance (DeFi) products like Compound and Aave with this new product.
American billionaire entrepreneur Mark Cuban told Armstrong to “go on the offensive” against the Securities and Exchange Commission. Moreover, he did not seem surprised that the agency threatened to sue the platform.
He told the CEO that this is ‘regulation via litigation. In a tweet, the billionaire entrepreneur said they aren’t capable of working through this themselves. Moreover, he said that the SEC and are afraid of making mistakes.
Ripple’s CEO, Brad Garlinghouse, also contributed to the matter involving regulations. CEO Brad urged the crypto community to join forces in ensuring watchdogs are impartial when regulating digital assets.
No Harm, No Foul, Right?
Armstrong said that it was some sketchy behavior coming out of the SEC recently. The SEC’s purpose is to protect investors and create fair markets. Armstrong is not quite sure who they are safeguarding here and where the harm is.
Several people in the crypto industry concurred with Cuban. Jerry Brito, a prominent lobbyist, tweeted that Coinbase should allow the SEC to sue the firm and get a legal confirmation in the courts. CEO of digital asset manager DFG, James Wo, suggested that Coinbase takes the SEC to court, which could eventually be beneficial.
Wo also said he would view this as a short-term conflict between the crypto business and regulators. He noted that it is hard for regulators to give clear instructions without these conflicts.