Brian Armstrong, co-founder and CEO of popular cryptocurrency exchange Coinbase, has called for better regulatory clarity in the crypto space after the company was stopped from launching its cryptocurrency lending product by the Security and Exchange Commission (SEC).
The Coinbase CEO took to Twitter today to lament the unfair treatment the San Francisco-based exchange has suffered at the hands of security regulators.
According to Armstrong, the exchange’s efforts to offer a cryptocurrency lending product that would enable investors to earn yield when they lend their funds were denied by the SEC on the grounds that the offering “is a security.”
In a bid to get a more concise explanation of why the trading firm’s proposed lending product was not given the necessary regulatory approval, Coinbase CEO noted that the exchange reached out to the SEC.
However, the regulator did not give any explanation as to why it was stopping the exchange’s proposed lending product.
Instead, the SEC threatened legal action against Coinbase should it proceed to launch its crypto lending product, Armstrong said.
Hidden Agenda Against Coinbase
“[The SEC] tell us they will be suing us if we proceed to launch, with zero explanation as to why [we should not launch the lending product],” excerpts of the tweet read.
Armstrong believes there is more to the SEC’s stringent measure against the exchange considering the fact that several crypto-related companies have been offering similar products for years without the regulator moving against the initiative.
“Meanwhile, plenty of other crypto companies continue to offer lending features, but Coinbase is somehow not allowed to,” he said.
Armstrong recalled his recent journey to Washington DC in May to meet with various regulatory bodies to establish a good working relationship between the crypto industry and regulators, and to gain more regulatory clarity in the country’s crypto sector.
However, out of all the agencies Armstrong reached out to, the SEC happened to be the only regulator that refused the meeting, saying they were not available to meet with cryptocurrency companies at the time, the Coinbase co-founder stated.
Calls for Regulatory Clarity Continue
Following the SEC’s strict regulatory measures against the exchange, Coinbase is calling for clearer regulations for the crypto space.
Coinbase is not the only cryptocurrency exchange calling for more regulatory clarity in the crypto space. Several companies have also called for the industry to be regulated.
Meanwhile, Jeremy Allaire, CEO and co-founder of Circle, said in an AMA session that the lack of regulatory clarity in the crypto space is one of the stumbling blocks hindering the growth of the industry.