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· Posted on
February 21, 2024

Coinbase could be getting sued by US regulators

Coinbase has been trying to launch Coinbase Lend...but regulators aren't happy about it.

What's the key learning?

  • Coinbase is a cryptocurrency exchange worth a massive US$100 billion
  • Coinbase wants to enter the decentralised finance space with Coinbase Lend
  • The US version of ASIC, the Securities Exchange Commission, says it'll sue them if they do.

Background: Coinbase is a cryptocurrency exchange worth US$100 billion. It has around 68 million verified users, and it spans a huge 100 countries.

What happened: Over the last few months, they've been trying to launch Coinbase Lend. This platform would let users give money to Coinbase Lend, who'll lend it someone else. And they're promising a 4% interest rate on the loan.

What else: It's part of Coinbase's plan to get into decentralised finance - or DeFi for short. But the US Securities Exchange Commission says it'll sue Coinbase if it does.

So what's the key learning?

💡Decentralised finance is a new form of finance that doesn't rely on an intermediary - like a bank.  

💡DeFi platforms let people lend money from others, or earn interest in savings-like accounts, without a bank in between. And it's all done through blockchain - mainly using cryptocurrency Ethereum.

💡As crypto platforms make moves into more heavily-regulated and traditional industries like banking, the scrutiny on the crypto industry as a whole in only getting deeper. And it's starting to look a battle...One bigger than Trump v Rosie O'Donnell.

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