Coinbase Cancels Crypto Product Following SEC Pressure

In a previous opportunity, we had reported on how the Securities and Exchange Commission of the United States was threatening to sue one of the exchange with the greatest success in the world, Coinbase, so that it desists from launching a financial product based on crypto-loans in October. Financial Times recently confirmed that the cryptocurrency company completely canceled the project following the securities regulator's warning.

The CEO, Brian Armstrong, had made public statements about two weeks ago, in which he strongly stated that he was not clear about the reasons why the Commission claimed that his product would constitute an unregistered security. Thus, last Friday in a statement the company communicated the difficult decision, without neglecting its mission to work to achieve regulatory clarity for the entire crypto industry as a whole.

Coinbase had been preparing the product since June, and according to its promotional material, it was going to offer an annual rate of return of 4% for holders of its stablecoin or stablecoin: USDC. This would have been the turning point that led to the legal debate about whether or not this program would constitute an investment. Notably, according to the source, the US Supreme Court has previously ruled that an investment contract exists when “a person puts his money in a company common waiting for a return simply by the efforts of the promoter or a third party ".

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Elijah Casanova
Last year law student at the Universidad del Pacífico. With an interest in blockchain technology, business and administrative law.

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