- Coinbase put out a statement supporting stablecoins after the US SEC’s move to sue Paxos.
- The exchange mentions that threats of litigation would drive innovation offshore and stresses that it should not happen to regulated products.
- This move from the US poster child for crypto exchanges comes after founder, Brian Armstrong, pushed back against SEC’s decision to attack the staking sector.
Coinbase has been a go-to crypto exchange in the United States that has ensured to not step outside the lines. However, the recent lawsuit from the US Securities and Exchange Commission (SEC) has pushed the trading giant to come out with a statement supporting stablecoins.
Coinbase supports Paxos and stablecoins
Coinbase, in their recent statement, mentioned that stablecoins are not securities. This stance is extremely important to not just the crypto space but also the traditional finance sector. Some examples of stablecoins include Tether (USDT), Circle USD (USDC), and Binance USD (BUSD). Stablecoins are cryptocurrencies that are pegged 1:1 with the US Dollar.
The US-based exchange mentioned that stablecoin, “like USDC make settling payments instant and cost-effective.” While the traditional finance space takes time to settle payments, “They (stablecoins) allow you to receive payments in just seconds, without the long processing time and high fees that can be associated with intermediaries like banks and credit card companies.”
In its tweet thread, the crypto platform mentioned that if the SEC continues to enforce securities laws on a regulated product like stablecoins, it would “push innovation offshore” and end the US’ “global rule.”
Coinbase’s bold statement clearly indicates that it is standing up against the SEC’s bullying and in doing so, supporting stablecoins and Paxos indirectly. But the exchange cleverly makes the distinction by saying, “we don’t know what aspects of BUSD might be of interest to the SEC.”
SEC is deemed a bully
Coinbase’s take on the SEC's strongarming regulated platforms is true to a certain degree. Before sending Wells Notice to Paxos Trust for allegedly offering unregistered securities, the SEC attacked the number two cryptocurrency, Ether and the entire staking ecosystem and the platforms that offer it.
Kraken, another US-based exchange, agreed to stop their staking services and pay a fine to the tune of $30 million. When the news of this move from the SEC broke out, Coinbase founder, Brian Armstrong, stood up against law enforcement and stated, “Coinbase's staking services are not securities. We will happily defend this in court if needed.”
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