The US Government is tightening the regulation over cryptocurrencies – in particular, stablecoins. During a New York crypto event, SEC officers handle a subpoena to a speaker before he takes the stage. Moreover, Coinbase is suspending the launch of its crypto product LEND, after the SEC lawsuit threat.
Recently, the Securities and Exchange Commission (SEC), under its chair Gary Gensler, is aggressively strengthening the crypto regulatory framework. At the Messari Mainnet 2021 crypto conference, a participant witnessed an event speaker being “served by the SEC”. Rumour has it that it was Do Kwon, founder and CEO of Korean stablecoin project Terra.
Messari CEO Ryan Selkis, the event organizer, confirms that a subpoena was issued at the event. Moreover, he said he intends to run for the US Senate, in order to establish a more suitable regulatory framework for the crypto industry.
Meanwhile, the US Treasury Department is about to release a report on stablecoins. That may pave the way for the government to launch new measures regulating stablecoins. Bloomberg reports that the department believes stablecoins are a major risk in the crypto market. It may suggest setting the framework for a new federal approach to the stablecoin industry.
Last week, the SEC chair told The Block that custodial crypto lending and staking products should fall under the scope of US securities laws. Thereby, many DeFi platforms should be subject to the SEC’s oversight. Moreover, he believes that stablecoins qualify as a security.
Coinbase Drops LEND Product After SEC Lawsuit Threat
This week, a feature on the New York Times highlights the growing regulatory concern around stablecoins. Bringing stablecoins under regulatory control is “the most important conversation in Washington financial circles this year”. Also, it becomes a key area that the Federal Reserve, the Treasury Department, among others, are studying.
Recently, crypto exchange giant Coinbase is publicly confronting the SEC. The securities regulator views Coinbase’s upcoming crypto yield product, LEND, as a securities offering. Therefore, SEC believes if Coinbase launches this new service to customers, Coinbase needs to apply for permission from the SEC. Otherwise it will sue Coinbase for violation of the securities laws.
Later, Coinbase announces the cancellation of the launch of the Lend product. Coinbase’s Lend program could provide users with a 4% interest on holdings of the USDC stablecoin.
In a blog, Coinbase says it will not launch the USDC APY Lend product. And the exchange will continue to seek regulatory clarity for the crypto industry as a whole. Also, Coinbase reveals that hundreds of thousands of customers have already signed up in the waitlist for the program.
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