After Coinbase…Regulatory Audit Reaches One of the Most Popular Cryptocurrency Lenders in the US
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Answer After Coinbase…Regulatory Audit Reaches One of the Most Popular Cryptocurrency Lenders in the US
Recently, Coinbase, which operates one of the leading cryptocurrency exchanges in the United States of America, revealed that the Securities and Exchange Commission has threatened it with a lawsuit over its stablecoin lending service.
According to Coupon Peace, the SEC has not provided any explanation as to what makes these loan products unsafe despite trying to contact them for more than 6 months.
Now another cryptocurrency lending service has joined the ranks of companies threatened by the SEC.
According to a filing on September 16, the Alabama Securities Office issued an occasional notice to Celsius, a well-known cryptocurrency lending platform, asking them to explain why their offerings violated US security laws.Read:Blockchain firm Flow launches $725 million fund backed by a16z, DCG, and Coatue
According to the notice:
The investment programs, which have been designated as the Celsius Rewards Program, constitute a solicitation to invest money, from which a return on investment is expected, with this return on investment based on management efforts.
Required investments, which are designated as the Celsius Rewards Program, constitute an investment variation and are considered securities under the Securities Act.
The Alabama office has sought answers from the crypto-lending platform as to why its products are not registered under state securities law.
Crypto companies in the United States of America are preparing for a regulatory confrontation:
The debate over security regulations in the US has come to a head due to the ongoing lawsuit over Ripple along with recent regulatory warnings from two other crypto lending platforms.
Several US lawmakers have claimed that existing laws are not clear enough to control the cryptocurrency market and sought better clarity from the Securities and Exchange Commission (SEC).
While most Coinbase proponents believe that the SEC is trying to protect banks that offer minimal interest rates on lending, crypto lending services may be a threat to their business.Read:New Russian Draft Law Threatens to Get 30% of Unauthorized Bitcoin
On the other hand, the SEC refuses to provide clarification on what constitutes a security.
Ongoing outcry against SEC policies, and this may accelerate regulation in the USA.
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