Coinbase Global Inc said on Wednesday that it has received a Wells notice from the U.S. Securities and Exchange Commission (SEC) over its plans to launch an interest-yielding crypto lending programme.
Coinbase’s chief legal officer, Paul Grewal, confirmed the Wells notice, an official way SEC tells a company that it intends to sue the company in court, in a blog post.
He said Coinbase would delay the launch of its ‘Lend’ product until at least October as a result.
Programmes that allow owners of cryptocurrencies to lend these in return for interest are becoming more common around the world, but some regulators, particularly in the United States have started to raise concerns, arguing that such products should comply with existing securities laws.
The U.S. state of New Jersey ordered the cryptocurrency platform BlockFi Inc in July to stop offering interest-bearing accounts that have raised $14.7 billion from investors.
Grewal said in his blog that the SEC’s concerns about Coinbase’s ‘Lend’ were related to the fact that the regulator believed the product involved a security.
Grewal said Coinbase felt that this was not the case.