Sunday, February 5, 2023

Coinbase Needs Clarity On Stablecoin Interest, Says Alex Mashisnsky

After Coinbase CEO Brian Armstrong revealed that the company has received a Wells Notice from the United States Securities and Exchange Commission (SEC), the crypto community came out in support of the trading platform. 

The exchange has been sued by the regulator for its proposed Lend program in which it offers 4 percent interest on customer holdings of the USD Coin (USDC).

The CEO of the crypto exchange took this issue to Twitter and expressed his disappointment towards the regulator, as it was not clear why SEC believed the product is a security.

Meanwhile, other crypto trading platforms like Celsius and BlockFi offer similar products to the customers.

On Wednesday, during an interview with Yahoo Finance, the CEO of Celsius, Alex Mashinsky stated that the crypto industry needs clarity.

He said, “I think we’re going through these murky waters right now and we need to get clarity and it’s going to take a little bit of time before we get the rules and we can start running faster.”

Coinbase has already been offering yields on crypto-assets like Ether, but as the SEC took an action against the crypto exchange, recently, so it appears that the regulator has an issue with offering interest on USDC stablecoin deposits.

“The SEC claims yield on USDC may be security if paid to non-accredited investors. Coinbase did not ask permission for all assets only for USDC,” said Mashinsky.

Notably, Celsius also offers interest on the USDC and other stablecoins to non-accredited investors. However, the SEC did not sue Celsius because the crypto trading platform has pioneered the area, said Mashinsky.

When the CEO of Celsius was asked whether his crypto exchange would be able to successfully navigate the same kind of regulatory scrutiny. Mashinsky stated that everyone would have to wait, currently, for SEC’s decision.

He added, “Looks like Coinbase wants to take the SEC to court like XRP and prove they went beyond their charter.”

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