Mark Cuban, a Dogecoin supporter, and the team Dallas Mavericks’ owner, gives his suggestion to Brian Armstrong (the CEO of Coinbase) for attacking. The words of Cuban were referring to the news telling that the SEC (Securities-and-Exchange-Commission) of the United States has threatened the exchange to sue it to court over its offering of Lend project to the consumers. In response, Armstrong stated that his company was making a strategy to introduce the program just in some weeks. However, presently it is considered suitable to get to the securities department for making a friendly and wise discussion to bring up their valuable feedback regarding the scenario.
Nonetheless, Armstrong was slightly shocked by the response of the department regarding its declaration of the Lend product as security, in addition to giving no explanation why it evaluated the product so. The base regulation according to which the Lend project has been determined as security is still an unanswered question. Moreover, Armstrong elaborated that the firm has been threatened by the SEC to be sued against if the launch of the Lend project is carried out. The department is in advance much aggressive because of the currently continued case with Ripple Labs. Some people propose that the firm will take guidance from the ongoing case and move in its own direction feely.
The Coinbase Lend program
The title of the project proposes that Coinbase Lend may deal with the company’s lending of tokens to its platform for earning interest. Many of the other platforms like Nexo, Celsius, and Crypto.com have offered such well-known practices already. The consumers move to the lending programs firstly due to its offering of greater interest as compare to that given by banks in cash, and secondly, it is supposed to be less hazardous than yield farming that uncovers impermanent losses for farmers.
An impermanent loss occurs when a liquidity pool is provided with liquidity. Following this, the deposited assets’ value changes as compared to their value at the time of deposit. As the change mounts, the chances for the customers increase that they may have a more chance for impermanent losses.
Cuban recommends regulation through litigation
Cuban remarked on the scenario by suggesting regulation through litigation and presumed that the firm is not in a position to tackle the legislation of securities without this method. He concluded his tweet by noting that the organization should attack the aggressive opponent as a simple interpretation.