The SEC (Securities and Exchange Commission) chairman, Gary Gensler, has taken the stance that the newest – not yet released – offering from Coinbase is included in their definition of a security and wants to regulate it accordingly. All CEX’s (Cryptocurrency exchanges) are created to allow customers to trade cryptocurrencies using their own money; the upcoming offer from Coinbase called Lend will allow you to lend your cryptocurrency in the form of USDC to other traders with an APY of 4%. That move has put Coinbase in the scopes of the SEC regulations should they go ahead with the launch.

What Does The SEC Disagree With?

The facts are clear, cryptocurrency is changing the way that people use, save, and invest their money. That change has appeared and increased over the last twelve years since the mass introduction of Bitcoin in 2009.

However, as with everything; evolution is only a matter of time. Digital assets such as BTC already allow for most of the abilities of regulated fiat currencies; buying and selling goods, trading, savings, and investments. But it is the newest ability – lending – that has brought scrutiny towards Coinbase.

While it has always been possible to lend your cryptocurrency to another person, Coinbase wants to allow mass adoption of lending and borrowing to the masses.

Senator Elizabeth Warren claims that “crypto is the new shadow bank – It provides many of the same services, but without the consumer protections or financial stability that back up the traditional system.

Why Coinbase?

Of course, Coinbase is not the first or only platform to allow borrowing and lending of cryptocurrency. That may make you wonder why the SEC is so interested in Coinbase, and not so much the other platforms such as CoinLoan and BlockFi.

The fact is, BlockFi is already facing investigations, but the high-profile standing that Coinbase has, means that the SEC wants to make an example of them, showing the world that regulations are on their way.

Everyone knows that regulations are on the way for the cryptocurrency industry. However, the question is; will they keep up with the rapid evolvement?

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