Coinbase has abandoned its planned interest-earning product two weeks after the cryptocurrency exchange revealed that the SEC was threatening to sue over the issue.
Earlier this month, chief legal officer Paul Grewal wrote in a blog that the SEC had sent Coinbase a Wells notice warning that it intended to sue in court over the planned Lend programme.
In a 21 tweet-long thread, Coinbase CEO Brian Armstrong accused the watchdog of some "really sketchy behavior," adding that it refused to meet with him in Washington earlier this year.
The Lend programme would have let eligible customers earn interest on select assets on Coinbase, starting with four per cent APY on USD Coin.
Now, in an update to a June blog, the company says it is not launching the programme and has discontinued a waitlist which had seen hundreds of thousands of customers sign up.
"We will not stop looking for ways to bring innovative, trusted programs and products to our customers," says the update.
In his earlier blog, Grewal claimed that the firm could have "simply launched" Lend without approaching the SEC and that other crypto companies "have had lending products on the market for years".
"The SEC told us they consider Lend to involve a security, but wouldn’t say why or how they’d reached that conclusion," he added.