Coinbase CEO Brian Armstrong has responded strongly to the company’s current relationship with the SEC. According to him, the SEC is threatening to sue the cryptocurrency exchange if it launches its revenue-generating product called Coinbase Lend.
With this new product, Coinbase aims to compete with popular decentralized financial products (DeFi) such as Compound and Aave. The company plans to operate a credit pool focused on USD Coin (USDC), a stablecoin that is pegged to USD.
If the company manages to launch Coinbase Lend, users can contribute to the credit pool by sending crypto assets to Coinbase Lend. Eventually, the company plans to borrow these crypto assets. Coinbase users receive high interest rates in return to contribute to the loan pool. Coinbase promises 4% APY on its preview page.
According to Brian Armstrong, the company reached out to the SEC prior to the release. “They responded by telling us about this loan …