The Securities and Exchange Commission (SEC) of the United States has raised major concerns, as evidenced by the recent Coinbase lawsuit.
Tensions in the crypto business have risen once more after Coinbase revealed details of its conversations with the SEC, which has refused to issue essential advice and is threatening to prosecute the crypto exchange for its new Lend program.
This is the first time the crypto firm and its Chief Legal Officer have made a statement expressing their dissatisfaction with the US Securities and Exchange Commission’s dishonesty.
The SEC’s final comment on Coinbase’s long-awaited Lend program kicked off the case, which was set to commence in a few weeks.
Because the SEC considers Lend a security risk, they have threatened to sue Coinbase if it launches the program.
As a result, Coinbase has asked for an explanation from the SEC as to why it believes it is a security and guidelines on how to classify such a financial instrument.
As a result, the SEC withheld information, which irritated the Chief Legal Officer and CEO Brian Armstrong, who chose to issue a lengthy statement on Twitter.
Brian further points out that, unlike Coinbase, many crypto companies on the market offer this type of service and loan function but have not been shut down or discriminated against.
The biggest paradox, however, is that Gary Gensler, the new chairman of the SEC, declared in March this year that the SEC must provide direction and clarity, yet now the SEC is refusing to issue standards that identify what a security is and why Coinbase wants to sue.
It is hoped that Coinbase’s decision to reveal the backdrop to this litigation would drive the SEC to rethink its policy and provide regulatory clarity and advice to other crypto enterprises in the event of a court ruling.