Following an earlier warning from the SEC, Coinbase has decided to shut down its crypto lending product.
In a recent blog update, the leading crypto exchange announced that its USDC APY program would no longer be launched. Coinbase blamed its decision on a lack of clarity from regulators.
Since Coinbase announced the product in June, thousands of customers have signed up. The program was supposed to yield 4% annually on USD Coin (USDC) deposits.
The program suspension comes less than two weeks after the US SEC threatened Coinbase with legal action if the exchange launched the Lend program.
Chief legal officer at the exchange, Paul Grewal, later opined that the lending product was not an “investment contract or a note.” He also questioned the SEC’s decision saying it lacked clarification.
Initially, the crypto trading platform said it would be pushing the launch of Lend to at least October. However, it is now unclear if the product will be rebooted in the future.
Coinbase remains one of the largest crypto exchanges in the world, with over $6.3 billion in daily trading volume, according to CoinMarketCap. Earlier this month, the exchange announced plans to raise $1.5 billion in a debt offering to grow the company’s balance sheet.