Coinbase Shares Plummet Following Threats Of SEC Lawsuit

Shares of Coinbase tumbled 11.63% after closing on Tuesday, and the negative trend continues today in pre-market trading.

According to Nasdaq data, COIN was down an additional 2.93% at press time, and the pre-trade dump took the stock to $ 258.50.

Coinbase shares began to plummet due to the general collapse of the cryptocurrency market, as the exchange also experienced another disruption resulting in delayed or canceled transactions.

Bitcoin fell 11% on the same day that El Salvador adopted the cryptocurrency as legal tender.

Many other major cryptocurrencies, including Ethereum, Gimbal, Binance Coin, and Un pois, also suffered double-digit losses as nearly $ 300 billion was written off the market within hours.

Ella exchange said the outage was caused by “a sudden spike in network traffic and market activity,” and that service resumed around 1:40 pm EST Tuesday.

Coinbase in the SEC’s crosshairs

However, disruptions weren’t the only concern of the exchange throughout the day.

San Francisco-based exchange revealed that the United States Securities and Exchange Commission (SEC) is threatening to take the company to court over plans to launch its new high-yield product called Lend.

Lend program would pay owners of USD Coin (USDC), the second cryptocurrency pegged to the US dollar, a 4% interest on their holdings. Despite six months of discussions between Coinbase and the SEC, the agency now appears to be considering the product as a security offering. This means that you must register the product with the agency as such.

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Notably, as Coinbase noted, the SEC did not provide the company with any meaningful explanation of its intentions.

“A healthy regulatory relationship should never leave the industry in that kind of inexplicable restraint,” Coinbase Chief Legal Officer Paul Grewal wrote in a statement. blog post on Tuesday night.

Grewal added that the SEC has offered Coinbase to send a letter written in defense of Lend, “but it would be useless when we don’t know the reasons behind the SEC’s concerns.”

As it stands, Coinbase said it won’t launch Lend until at least October, pending “further regulatory clarity.”

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