SEC threatens to sue Coinbase, and Ukrainian authorities legalize cryptocurrency
Coinbase has a conflict with the SEC
The SEC has warned Coinbase about its readiness to take the project to court. The Securities and Exchange Commission considers it illegal for the crypto platform to launch the Lend service, which allows users to accrue interest on the digital assets of exchange clients, similar to securities.
At the end of June this year, Coinbase announced the launch of a service for cryptocurrency owners who would like to make a profit in USDC. Lend service offers a rate of 4% per annum, which is 8 times the average rate for high yield savings accounts in the country.
“They [the SEC] refuse to tell us why they think it’s [the service] a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why,”
“They [the SEC] refuse to explain to us why they think that it [the service] is a security, and instead asked for documents (we provided), summoned our employees for questioning (we agreed), and then said that they would file court, if we continue to launch without explaining the reasons, “ said Coinbase CEO Brian Armstrong.
The new service of the crypto platform is a loan that the client provides to the exchange in the form of USDC. Coinbase believes the new product has similarities to bank savings accounts.
Ukrainian authorities legalize cryptocurrency
Today, on September 8, deputies of the Ukraine’s Verkhovna Rada in the second reading approved the draft law “On virtual assets” aimed at regulating the digital assets industry. Now the owners of cryptocurrencies will be able to legally perform transactions with them, and international projects — to register a blockchain business on the territory of Ukraine.
The law reflects the concept and legal status of a digital asset, as well as secures ownership and transaction rights. International crypto-exchanges, where virtual assets are traded, have the opportunity to work on the territory of Ukraine.
“Cryptocurrency holders will receive a number of benefits. Due to the fact that legislative regulation of this area will appear, they, at least, will be able to protect their condition in virtual assets if something happens. They will also be able to legally exchange crypto assets, declare them. This process will be completely “white”. In addition, we expect that there will be a whole market of intermediary services for paying for goods with cryptoassets, storing them, exchanging them. This will expand the possibilities of their use,” said Alexander Bornyakov, Deputy Minister of Digital Transformation for IT Development.
Hong Kong is considering tightening controls on the digital asset market
Hong Kong authorities are exploring the possibility of tightening control over the digital asset market. The new regulations should help close the loopholes for illegal cryptocurrency transactions that remained in the 2019 law.
The Hong Kong Securities and Futures Commission (SFC) plans to take over the regulation of crypto assets and issue licenses to projects from this industry. According to the rules of 2019, in order to avoid the attention of the regulator, companies had to choose tokens for work that do not formally fall under the definition of “security” and “futures”.
Julia Lyng, deputy executive director of the structure, pointed to “significant losses for investors.” In her opinion, “Hong Kong should put an end to unlicensed cryptocurrency trading and engage in financial literacy of investors.”