Coinbase drops 6% as it plans to launch crypto lending business

By Dhirendra Tripathi – Coinbase (NASDAQ: COIN) shares recovered some losses but traded down 6% on Monday after the platform succumbed to pressure from regulators and scrapped plans to start a business of crypto lending.

The company announced its decision in a blog post on Friday.

In a communication to the crypto platform, the Securities and Exchange Commission threatened to sue the company if it continued its plan to allow users to earn interest by lending crypto assets.

This was brought to light when earlier this month, crypto exchange co-founder and managing director Brian Armstrong publicly attacked the market regulator.

“If you don’t want this activity, just publish your position, in writing, and apply it consistently across the industry,” Armstrong tweeted on Sept. 8 while noting that many other crypto companies continue to do so. offer the loan function.

He lamented that the regulator has not provided any guidance on the products even though it threatens to sue him.

Today’s crypto collapse added to Coinbase’s weakness. Bitcoin (BitfinexUSD), the largest crypto by market cap, fell more than 7% to trade just above $ 44,000, recouping some of the losses after falling to 42,547.1 earlier in the daytime.

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