The CEO of Ripple along with the crypto community is showing its support for Coinbase and its CEO who announced that he received a threat of lawsuit from the US SEC.
September 9, 2021, | AtoZ Markets – The crypto community is showing its support for Coinbase and its CEO, Brian Armstrong, who announced Wednesday that he received a notice from the US Securities and Exchange Commission (SEC).
The SEC has threatened to sue the cryptocurrency exchange over its Lend program, where it offers customers 4% interest on USDC savings. The company’s CEO, Brian Armstrong, said on Twitter on September 8 that the regulator did not clarify why he considered the product in question a security.
Crypto community shows its support for Coinbase
The head of Ripple, Brad Garlinghouse, said that the warning received from the SEC put Coinbase in a situation similar to his company. He stressed that the regulator “continues the war against cryptocurrencies” and hinted at possible cooperation between the two organizations.
Thankfully today many recognize the havoc caused by regulation by enforcement. We’re ready to work with responsible actors, pro-innovation members of Congress, and others in paving a path to clarity and certainty with US regulators. 2/3— Brad Garlinghouse (@bgarlinghouse) September 8, 2021
“If you want to go fast, go alone. If you want to go far, go together,” wrote Garlinghouse.
Ripple General Counsel Stuart Alderoty also spoke out in support of the bitcoin exchange. He noted the “understandable regulatory framework” in jurisdictions such as the United Kingdom, Singapore and Japan that fosters innovation. According to him, a diametrically opposite situation has developed in the United States.
Some (UK, Singapore, Japan, etc) have clear frameworks for innovation to flourish w/ consumer & market protection, others with sandboxes for safe collaboration between innovators & regulators. How did the US end up with secret regulatory inquisitions? 2/2— Stuart Alderoty (@s_alderoty) September 8, 2021
Notably, Coinbase’s competitors Celsius and BlockFi also offer similar products.
While speaking to Yahoo Finance, Celsius Network Co-Founder and CEO Alex Mashinsky stated that everyone in the crypto industry is waiting for clarification:
“We are in an unknown right now and we want clarification. It will take time for us to understand the rules and move forward faster.”
Mashinsky said that Coinbase already offers interest on crypto assets like Ether, so they think the main problem with the SEC is the interest offered on USDC holdings.
“The SEC claims that interest on USDC savings may be securities if they are given to non-accredited investors.”
Celsius, whose managed assets exceed $20 billion, also pays non-accredited investors interest on their USDC and other stablecoin holdings. However, Mashinsky said Celsius is a pioneer in this field and it takes a long time to perfect its products.
Asked if this means Celsius could successfully fend off a similar charge from regulators to Coinbase, Mashinsky replied:
“Everyone will have to wait and see the new regulations from the SEC. It looks like Coinbase will take its issue with the SEC, like XRP, to court.”
Billionaire investor Mark Cuban, owner of the Dallas Mavericks, advised Armstrong and Coinbase to go on the offensive, arguing that the SEC was trying to “regulate through litigation.”
Brian, this is "Regulation via Litigation". They aren't capable of working through this themselves and are afraid of making mistakes in doing so. They they leave it to the lawyers. Just the people you don't want impacting the new technologies. You have to go on the offensive— Mark Cuban (@mcuban) September 8, 2021
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