Coinbase will likely take the SEC to court, says Celsius CEO Alex Mashinsky
Support came from every corner of the crypto community after Coinbase CEO Brian Armstrong announced that the U.S. cryptocurrency exchange was facing criminal prosecution from the Securities and Exchange Commission (SEC) for its proposed lend program.
The Coinbase Lend Program is a crypto return program that offers 4% annual returns on USDC stablecoin deposits. In a 21 thread tweet, Armstrong explained that the SEC had informed Coinbase that the service was being viewed as collateral without giving any explanation and warned against starting the earnings program.
“They refuse to tell us why they think it is a security and instead upload a series of records from us (we comply), demand a statement from our employees (we comply) and then tell us that if we continue to go to market without explaining why they will sue us, ”said the CEO.
Similar products are offered by Coinbase’s competitors Celsius and BlockFi. Celsius Network founder and CEO Alex Mashinsky responded to the incident by stating that the crypto industry deserved more clarity about the decisions of the SEC and how it classified a product as a security.
Mashinsky stated that the SEC’s actions could be due to Coinbase’s attempt to generate returns on both crypto-assets like ether and stablecoin deposits from USDC.
“The SEC on USDC return on assets can be a security when paid to non-accredited investors. Coinbase has not only asked permission for all assets for USDC, ”he added. The executive also said Coinbase will likely take the SEC to court, arguing that the regulator was acting beyond its charter.
Mark Cuban, the owner of Dallas Mavericks, was appalled by the SEC and ‘s treatment of the crypto industry devices Armstrong is said to “go on the offensive”.
He argued that the SEC is trying to get regulation through litigation, adding that Coinbase should take on the SEC before the regulator attacks a small decentralized financial institution (DeFi) without the resources to fight back and get a verdict that makes the law clear to the entire DeFi industry.