After the Securities and Exchange Commission purportedly threatened to sue Coinbase over its upcoming Lend programme, the billionaire entrepreneur and crypto investor today advised the cryptocurrency exchange Coinbase to “go on the offensive” against the SEC.
“Brian, this is ‘Regulation via Litigation,'” Cuban tweeted to Brian Armstrong, the CEO and founder of Coinbase. “They are incapable of resolving this issue on their own and are terrified of making mistakes. They [sic] leave it to the lawyers to handle. Just the types of people you don’t want to have a say in how new technologies are developed. You must take the initiative.”
Brian, this is “Litigation-Based Regulation.” They are incapable of dealing with this on their own and are terrified of making mistakes. They defer to the attorneys. Only the folks you don’t want influencing emerging technologies. You must go on the offensive.
According to Coinbase, the business has taken a more collaborative approach, meeting with regulators for half a year in a bid to have its Lend product approved—only to be stonewalled by an agency that will rule on the product’s legality but will not divulge the reasoning behind the verdict.
Coinbase Lend, which was announced in June but has yet to be launched, is a product that promises USDC stablecoin holders on Coinbase 4% returns on their savings; the exchange intends to expand the service to other currencies. It’s similar to BlockFi and Celsius’s products, which provide high-interest returns on certain cryptocurrencies such as Bitcoin and Ethereum.