Coinbase is calling out the SEC for what it believes is “sketchy” behavior, but TheStreet’s Jim Cramer is not a fan of its strategy.
The issue involves Coinbase’s crypto lending program, called Lend. The service would allow individuals to lend their crypto assets and earn interest on the loans. Unfortunately, for Coinbase, the SEC seems to have an issue with Lend and has sent the company a Wells Notice.
“Last Wednesday, after months of effort by Coinbase to engage productively, the SEC gave us what’s called a Wells notice about our planned Coinbase Lend program,” writes Paul Grewal, Chief Legal Officer, on the company’s blog. “A Wells notice is the official way a regulator tells a company that it intends to sue the company in court. As surprised as we were at the SEC’s threat to sue without ever telling us why, we want to be transparent with you about the course of events leading up to it.”
CEO Brian Armstrong has gone even further, calling the SEC’s behavior “sketchy.”
TheStreet’s Jim Cramer believes Armstrong and Coinbase are playing a dangerous game, especially since SEC chair Gary Gensler “taught crypto at MIT,” and has the full weight of a government agency backing him up on his already knowledgable position.
“[Coinbase] is declaring war against a man who has unlimited firepower,” Cramer said.