Around seven years have passed since the first stablecoin — Tether (USDT) — began circulating. The list of stablecoins has grown in length and utility over time — so much so that they have now come to the attention of the Securities and Exchange Commission (SEC) and other regulators.
Regulation is on its way to the crypto world as a whole and, specifically, to stablecoins. Well-thought-out laws can be beneficial to the crypto industry, and when these standards are developed, uniformity and clarity will increase. Clarity from all regulating and enforcement authorities is critical for crypto enterprises to understand the parameters they must follow in the U.S market.
The SEC has publicly urged cryptocurrency companies to communicate with it. Unfortunately, at least one case hasn’t gone so well. Coinbase Global Inc. (NASDAQ: COIN) was just weeks away from introducing a new Coinbase Lend program in which clients could deposit USDC and earn a 4% annual percentage yield (APY).
Coinbase informed SEC in June of the program’s existence and anticipated launch date. But the company’s eagerness to cooperate with the SEC resulted in Coinbase being served with a Wells Notice, indicating that if it implemented the new program, the SEC would sue even though other similar programs already exist.
Coinbase requested information as to why it received the Wells letter, but the SEC would only say that the company’s Lend program violates securities laws. The…