Coinbase Drops Lend Product Plans After SEC Lawsuit Threat (decrypt.co) 27
Cryptocurrency exchange Coinbase has canceled plans to launch Lend, a product designed to deliver high-interest returns on USDC stablecoin holdings. From a report: A Coinbase representative confirmed the news to Decrypt this morning, referring us to a quietly updated recent blog post about the planned initiative, which was first announced in June but put on hold following the threat of legal action from the U.S. Securities and Exchange Commission (SEC) "Our goal is to create great products for our customers and to advance our mission to increase economic freedom in the world," the update reads. "As we continue our work to seek regulatory clarity for the crypto industry as a whole, we've made the difficult decision not to launch the USDC APY program announced below." Coinbase wrote that it had hundreds of thousands of people signed up to its waitlist, which has now been discontinued. "We will not stop looking for ways to bring innovative, trusted programs and products to our customers," the update concludes. Further reading: Is Lending Your Bitcoins a Security?
Does anybody else (Score:2)
Have trouble reading that headline?
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Blame Coinbase for its apparent liking for cutesy names. Once you realize "Lend" is the name of the service and not a verb, you can parse it.
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I think the cutsey name is because CoinBase would have been literally lending your BTC to third parties vetted by CB, and this isn't how people normally think of how their savings account is loaned out. There is actual risk that you will not see your BTC again (or at least this was the case with a similar product from another exchange).
I'm not a sophisticated gambler, but I cannot imagine why a person would want to borrow crypto coins at a pretty high interest rate, when they could also borrow money at a l
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Nope. Nobody bothered to read Coinbase's announcement before they threw their fit about the SEC saying "hey, that looks like a security, now give us all the info that you'd have to file to make a securities registration and anything related to that or we'll sue."
Lend [coinbase.com] was either a security (regulated by the SEC) or an interest-bearing bank account (regulated by the states and FDIC).
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"Overrated." my ass
Nope. Nobody bothered to read Coinbase's announcement before they threw their fit about the SEC saying "hey, that looks like a security, now give us all the info that you'd have to file to make a securities registration and anything related to that or we'll sue."
Lend [coinbase.com] was either a security (regulated by the SEC) or an interest-bearing bank account (regulated by the states
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Once you realize "Lend" is the name of the service and not a verb, you can parse it.
And putting quotes around "Lend" as you did would've made that immediately obvious.
Re: Today's Internet is a dystopian nightmare. (Score:1)
Good, fuck off and die already
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Exactly this. The whole point of crypto is to decouple from manipulated nationalized currencies. It needs to find a better benchmark than an existing currency, and tie to a more useful/realistic representation of "value"; cost of labor, commodity goods, precious metals with real utility, etc.
Re:Cryptocurrency may have to detach from fiat (Score:4, Insightful)
Impossible, because we have laws. Cryptocoin are assets that are taxable and can also be subject to securities, fraud and banking laws in certain situations. You're trying to escape the rule of law, and you will be a criminal.
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Right. And cash and strong encryption is only used by criminals.
No, you're completely and utterly clueless.
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Cash is an asset and also taxed, and banking and securities of cash are regulated. The government has access to the accounts and transactions protected by strong encryption by law. You are the clueless child.
Again, you want to be a criminal, and we the adults won't let you.
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Not sure why you think you're an adult, but adults don't accuse everyone of being a criminal with absolutely no cause.
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But I'm not accusing everyone, just one person wanting to bypass the rule of law.
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I have no interest in bypassing any laws, or rule of law. Because I know that, for a fact, I can say with certainty you are full of it.
Re: Cryptocurrency may have to detach from fiat (Score:2)
It's all been happening since a decade now, the only thing the 'law' has been applied to are these useless crypto exchanges (an exchange pretty much removes the few advantages of BTC)
Except for the regular joe all other parties just transact between themselves
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One of the most fundamental sources of earning is quite literally interest on lending, which only requires an agreed upon currency, a market for it, and sufficient liquidity.
Re:Cryptocurrency may have to detach from fiat (Score:4, Insightful)
You're always going to have to do the conversions, because the government wants to be paid in dollars (or euros, or whatever). You want to be paid in stablecoin? Fine, how much is that in US dollars (today) so the correct taxes can be withheld from your pay? You sold your house for stablecoin? Fine, what is that in US dollars (today and when you purchased the house) so you can pay the proper gains tax? You bought a stick of gum with stablecoin? Fine, what is that in US dollars so you can pay the sales tax? Oh, and by the way, you actually have to pay those taxes with dollars - where are you getting them?
If you think that kind of stuff is not going to be heavily regulated, you're delusional.
Furthermore, this particular case doesn't seem to have anything at all to do with the conversions. You are purchasing a managed asset (no matter what the asset is or what you paid for it with) from someone with the expectation of making a profit. That makes it a security. Securities are regulated.
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> You're always going to have to do the conversions
Correct, so a US pinned cryptocurrency backed by the appropriate pool will always be necessary, and of course that will be always regulated (and taxed).
But nobody is forced to use them exclusively if there are assets and derivatives that can be bought/sold/lent/borrowed that are not pinned to US $
It trades like a commodity and taxed like one, so (Score:3)
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> No, they will ask you to sell it and convert it to legal tender currency before they will put it in a saving account or CD.
A savings account and CDs they then use to lend from, and you get the tiniest infinitesimally insignificant fraction of their returns.
Yes, insurance and regulation (basically risk spreading) partially account for that spread, but the vast majority of it is pure profit.
Add a liquidity market and a underwriting market driven by smart contracts, and you can accomplish the exact same t
Other exchanges? (Score:2)
How will this decision impact other exchanges that have seemingly been offering lend and staking programmes for ages already?
Coinbase seems to have capitulated on this extremely quickly, after their CEO went on a rant about how shady the SEC was being, which makes me think they've finally done the due diligence and realised that there is no way they can bend the security laws in their favour (at least, for now - I imagine there is money being spent behind the scenes).
Presumably any other exchange offering t
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Coinbase seems to have capitulated on this extremely quickly
More likely their lawyers reminded them they are public now and convinced them it's not worth picking a fight with the SEC... and to turn it to their advantage by using the SEC as a weapon against their competitors.
i don't understand this (Score:2)
almost every exchange has an interest lending feature. and almost all of them work in the US. why can't coinbase make this work? is the SEC ignoring other exchanges?
my exchange will send me a 1099k at the end of the year. i will pay taxes on my USDC interest. why can't it be this simple for coinbase?