Coinbase Global Inc. is bowing to pressure from U.S. regulators and tabling plans to launch a product that would pay users interest for lending out their tokens.
The decision to shelve its Lend product, which the company announced quietly in a blog post on Friday, comes after the Securities and Exchange Commission threatened to sue the firm if it moved ahead. It also represents a dramatic reversal for Coinbase, whose top executives made its skirmish with the SEC public in defiant posts on social media on Sept. 7.
Coinbase’s about-face comes as the SEC under Chair Gary Gensler takes a tougher line on cryptocurrency products that may fall under the agency’s purview and the platforms that they trade on. The planned Lend program, which would have let users earn 4% by lending their tokens, has become a flashpoint in a growing tensions between the regulator and the burgeoning crypto industry.
“As we continue our work to seek regulatory clarity for the crypto industry as a whole, we’ve made the difficult decision not to launch,” the firm said in its Sept. 17 post. “We had hundreds of thousands of customers from across the country sign up and we want to thank you all for your interest. We will not stop looking for ways to bring innovative, trusted programs and products to our customers.”
An SEC spokesperson declined to comment.
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