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Coinbase CEO Laments SEC's 'Sketchy' Behavior As Regulator Threatens To Sue Over Cryp

Coinbase Global Inc (NASDAQ:COIN) CEO Brian Armstrong came down heavily on the U.S. Securities and Exchange Commission late night Tuesday on social media.

What Happened: In a series of tweets, Armstrong told the story of what transpired between the cryptocurrency trading platform and the SEC, describing the market regulator’s behavior as “sketchy.”

Referring to Coinbase’s yet-to-be-launched “Lend” product, Armstrong, said the company was “planning to go live” in a few weeks and gave the SEC a “friendly heads up and briefing.”

“They responded by telling us this lend feature is a security,” Armstrong wrote. “How can lending be a security? So we ask the SEC to help us understand and share their view.”

See Also: How To Buy Coinbase (COIN) Shares

“They refuse to tell us why they think it's 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.”

Armstrong said that Coinbase was “committed to following the law” but urged the SEC to publish guidance and “actually enforce it evenly across the industry equally.”

However, as per Armstrong, the SEC is refusing to “offer any opinion in writing.” Instead, they are “engaging in intimidation tactics behind closed doors. Whatever their theory is here, it feels like a reach/land grab vs other regulators.”

The Coinbase CEO said that the SEC refused to meet with him when he traveled to Washington D.C. in May this year. He said the regulator told him, “we’re not meeting with any crypto companies.”

Why It Matters: The Lend product offers a 4% APY on USD Coin (CRYPTO: USDC) coin to begin with — the platform is open pre-enrollment.

In a blog post, Coinbase Chief Legal Officer Paul Grewal claimed Lend did not qualify as a security as it is neither a contract nor a note.

“We shared this view and the details of Lend with the SEC. After our initial meeting, we answered all of the SEC’s questions in writing and then again in person. But we didn’t get much of a response,” wrote Grewal.

As per Grewal, SEC is assessing the product through Supreme Court cases called Howey and Reves. The regulator has not shared the assessment but only told Coinbase that it used that particular methodology.  The two cases date back to 1946 and 1990, respectively.

Grewal said as a result of the developments, Coinbase will not launch Lend until at least October.

Last month, the SEC filed its first-ever lawsuit against an organization over its activities related to decentralized finance or DeFi, alleging the sale of unregistered securities.

The SEC Chair Gary Gensler suggested last month that some DeFi projects have features that make them appear as the type of entities that the SEC is tasked with overseeing, reported the Wall Street Journal.

In December, the SEC sued Ripple, the company associated with the XRP (CRYPTO: XRP) token, alleging it conducted a $1.3 billion unregistered securities offering. 

Price Action: On Tuesday, Coinbase shares closed 4.18% lower at $266.81 in the regular session and rose almost 0.2% in the after-hours trading. The cryptocurrency exchange desk enables trading of cryptocurrencies like Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH) and Dogecoin (CRYPTO: DOGE).

Read Next: Dogecoin Gets Free Advertising As Coinbase Sponsors Mr. Beast Video: Why This Bull Is Charged Up

Photo: Courtesy of Marco Verch Professional on Flickr

5 Things You Might Not Know About Ethereum Creator Vitalik Buterin

One of the most well-known figures in the world of cryptocurrency is Vitalik Buterin. Known as the founder and creator of Ethereum (CRYPTO: ETH), Buterin also has experience with Bitcoin (CRYPTO: BTC).

Early Days: Buterin was born in Russia in 1994. His family emigrated to Canada when he was six years old.

Buterin excelled in school and was placed in an accelerated program for gifted students while in the third grade. Buterin naturally excelled in math and programming. It’s reported that Buterin could add three-digit numbers in his head twice as fast as kids his age at the time.

Worked At Bitcoin Magazines: In 2011, Buterin took a side job working for Bitcoin Weekly. As a writer, Buterin was paid 5 Bitcoin for each article written. At the time that made each article payment less than $5 for Buterin.

Bitcoin Magazine was founded by Buterin later in 2011 where he was the lead writer.

Creation of Ethereum: Buterin launched a white paper for Ethereum in late 2013. The goal of Ethereum was to add scripting to make it easier for application development. Buterin wanted to make it possible to set up binding contracts.

Ethereum was officially launched on July 30, 2015. Buterin currently holds 333,500 ETH in his primary wallet.

Today, the 333,500 Ethereum are worth $1.3 billion, making Buterin a billionaire.

Related Link: Ethereum Creator Vitalik Buterin Becomes A Billionaire As ETH HIts Another All Time High 

Donated To Charity: As the founder of a popular cryptocurrency, Buterin has built a large following of people from the community.

As a result, Buterin is often the subject of donations from new cryptocurrencies that hope Buterin will support them or others will see the coins in his public wallet.

Buterin was donated 50 trillion Shiba Inu (CRYPTO: SHIB), worth around $1.2 billion at the time. Buterin donated the Shiba Inu to the India Covid Relief Fund along with $2 million worth of Ethereum. The announcement that Buterin was donating the Shiba Inu instead of keeping it led to a crash in the price of the cryptocurrency.

Fake Death Rumor: In 2017, it was reported that Buterin died in a car crash. The rumor came from 4Chan, a popular board to share stories and often the subject of internet trolls.

Ethereum lost around $4 billion in value on the internet rumor. Ethereum’s price recovered, but the impact on the price from news of his death offered up a look at how important Buterin could be to Etehreum’s success.

The drop in Ethereum’s price also led to a comparison of Bitcoin’s founder being anonymous and Ethereum having a public founder.