Coinbase said it received a Wells notice from the SEC.
Michael Nagle/Bloomberg
Shares of Coinbase Global fell in early trading Wednesday after it said the U.S. Securities and Exchange Commission sent the crypto exchange a notice that the agency would sue the company if it goes ahead with a plan to allow users to earn interest by lending crypto assets.
Coinbase’s chief legal officer, Paul Grewal, wrote in a blog post that because of the SEC Wells notice it would delay the launch of its Lend product “until at least October.”
“We don’t know why” the SEC issued such a notice, Grewal wrote, insisting that Coinbase’s take is that the Lend program is not a security.
Barron’s emailed the SEC for comment early Wednesday but has not received a reply since the agency’s offices are closed.
In a similar move last month, New Jersey’s Bureau of Securities ordered crypto platform BlockFi to stop offering interest-bearing accounts.
Regulators around the world have begun to signal the end of the party for the wide world of crypto assets, amid worries that the current lack of oversight might one day compromise financial stability.
Coinbase stock was down 3.7% in premarket trading.
Write to Pierre Briançon at [email protected]
