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Investing.com – Coinbase stock (NASDAQ:COIN) fell 3.6% in Wednesday’s premarket trading as the U.S. Securities and Exchange Commission threatened to sue the company if it goes ahead with its plans to let users earn interest by lending crypto assets.
The latest erosion in prices of cryptos only added to the negative sentiment.
Millions of crypto holders have been lending out their funds to earn returns over the last few years, and Coinbase was about to join that momentum with its own product. But the SEC has checked that move, calling the product a security, according to Coinbase Co-founder and Chief Executive Officer Brian Armstrong, who put out a series of tweets to argue his case against SEC’s preemptive action.
“If you don’t want this activity, then simply publish your position, in writing, and enforce it evenly across the industry,” he tweeted while pointing out that plenty of other crypto companies continue to offer the lending feature.
He lamented that the regulator has failed to provide any guidance on the products even as it threatens to take it to court.
The development comes amid another round of heightened news flow around cryptos. Bitcoin (BitfinexUSD) fell below the $44,500-mark today before clawing back to trade above $46,300, down 9%. Ethereum ETH/USD and Cardano ADA/USD traded lower by 9% each. Dogecoin DOGE/USD fell 12%.
The latest slump in cryptos comes after El Salvador became the first country in the world to adopt Bitcoin as its national currency on Wednesday.
