Coinbase’s stock has dropped following the company’s decision to discontinue its interest-earning product in the face of SEC scrutiny.
Coinbase’s stock dropped more than 5% on Monday after the company stated that it would not be launching its expected interest-bearing product due to regulatory scrutiny from the United States.
According to CNBC, Coinbase’s stock dropped as a result of the decision, which coincided with a wider decline in the price of cryptocurrencies as a result of regulatory scrutiny around the world. Coinbase thanked its consumers for their support in a statement, promising that company would keep looking for new methods to bring new products to market.
“We had hundreds of thousands of clients sign up from across the country, and we appreciate your interest,” the firm said in a statement. “We will never stop exploring for new methods to provide our clients with innovative, trustworthy services and products.”
While there was no mention of Coinbase’s public spat with the Securities and Exchange Commission (SEC), this move comes just weeks after CEO Brian Armstrong accused the SEC of unfairly targeting his company.
In his Tweets from September 8, Armstrong claimed that the SEC was the only regulator who declined to meet with him on a recent trip to Washington, D.C. According to him, the rationale offered was that the agency had not met with any bitcoin companies. He later chastised the SEC for utilizing “intimidation techniques” against his sector by refusing to be honest or consistent with its views.
Armstrong believes it is unjust for the SEC to single out Coinbase for regulatory action given cryptocurrency lending is commonplace in the sector. Other competitors, such as BlockFi, based in New Jersey, have faced regulatory pressure from state-level organizations concerned about their own interest-bearing products.
Chairman Gary Gensler of the Securities and Exchange Commission (SEC) stated in August that his agency required more regulatory tools to regulate the cryptocurrency market. In testimony before Congress last week, Gensler stated that the crypto financing, issuance, trading, and lending markets lack adequate investor protection.
In his speech before the Senate Finance Committee, he compared it to the “Wild West,” a comparison echoed by Sen. Elizabeth Warren, D-Massachusetts, who routinely demands for increased control of the US banking sector.
Regulators in the United States are working on a variety of new measures to better understand the bitcoin sector. The President’s Working Group on Financial Markets is working on a report on stablecoins at the White House. Brief News from Washington Newsday.