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