As you are well aware already, Coinbase is currently in a lawsuit with the SEC over alleged unregistered security offerings. In this article, we'll cover that as well as the likelihood of Coinbase’s victory and what it'll mean for the broader crypto market structure in a macro view. First, let's look at the other time the SEC was against the crypto firm.

The SEC vs. Coinbase.

On April 14th, 2021, Coinbase became a public company on the Nasdaq exchange via a direct stock listing. The company then had an estimated value of $47 billion due to an initial reference price of $250 a share pre-listing, only to close at $328.28 per share on the first day.

That same year in September, the US Securities and Exchange Commission reportedly threatened to sue Coinbase if the company decided to launch a cryptocurrency lending program called Lend.

Lend is a program that allows cryptocurrency owners to lend them to borrowers in return for interest from the borrowers. Now this was already becoming a popular trend in the crypto space as of the time but Coinbase was not going to get a portion of that market share if it wanted to not go to court with the SEC. After the pushing of the first date prelaunch (this information came in right about the period the Lend program was to go live), there was an update made to a blog post on the Coinbase official website stating their discontinuity of the program. Besides the fact that the company CEO took to his Twitter page in a long message addressing the matter citing that the SEC hasn't given them clarity as to why they couldn't launch as it appears, they've been in contact with the SEC over how they'd launch the Lend program in over six weeks, only to publish a blog post on their website informing their clients of this new turn from the SEC. The more pressing matter is that Gary Gensler came into office early that same year of 2021, and already serving it hot with the crypto exchange.

Prior to his appointment, he was a professor of Practice of Global Economics and Management at the MIT Sloan School of Management. Baltimore, Maryland, U.S., co-director of MIT’s Fintech @CSAIL, and senior advisor to the MIT Media Lab Digital Currency Initiative, teaching his students about the usefulness of blockchain technology and cryptocurrency. Gensler was nominated by President Joseph R. Biden on February 3rd, 2021, as Chairman of the SEC, was approved by the US Senate on April 14th and sworn into office 17th of the same month.

Now with Gensler’s seriousness in the crypto overview and overzealous drive for investor protection, somehow we still experienced and saw all that happened in crypto winter (the last bear market that lasted for a period of 490 days), with the Terra Luna collapse, the Celsius insolvency case, the FTX collapse, etc all happening in the same year of 2022, just a year following the SEC’s display of ‘activeness’ in office as Gensler’s first term. Once again, out for that ‘active role’ with XRP’s lawsuit battle, Grayscale’s fight for a Bitcoin ETF, Binance’s crackdown, and now Coinbase, we can indeed say the SEC is at it again. But more importantly, what issue exactly does the SEC have towards Coinbase this time around? We’ll find out next on this same topic. As always, your favorite crypto journalist -Clever Abaribote. See you soon.

SOURCES:

Blog Post from Coinbase on the legal information served from the SEC: https://www.coinbase.com/blog/the-sec-has-told-us-it-wants-to-sue-us-over-lend-we-have-no-idea-why

Blog Post from Coinbase on the discontinuity of the program: https://www.coinbase.com/blog/sign-up-to-earn-4-apy-on-usd-coin-with-coinbase

Gary Gensler New Tenure: https://www.sec.gov/about/commissioners/gary-gensler#:~:text=Gary%20Gensler%20was%20nominated%20by,office%20on%20April%2017%2C%202021.