SEC threatens to sue, user trust declines, how can Coinbase save itself?

On April 14 this year, the news that Coinbase was successfully listed on the Nasdaq excited the entire digital asset industry, becoming a milestone event with far-reaching influence in the history of digital asset development, and greatly promoted the compliance of digital asset transactions. For a time, Coinbase became the compliance benchmark in the digital asset industry, and its every move attracted the attention of the public.

But in early September this year, Coinbase was warned of a lawsuit by the SEC for wanting to provide cryptocurrency lending products. In the SEC's view, the C2C lending and financial management service that Coinbase wants to launch, where users can lend money and get returns, is a security. If Coinbase launches this service, the SEC will sue it.

Such news is undoubtedly a severe blow to the digital asset industry. Looking back to 2020, Ripple was accused by the SEC. As soon as the news came out, it began to ferment wantonly. A large number of investors began to dump their stocks and leave the market. Major exchanges also delisted XRP and turned away from Ripple. To this day, Ripple has not ended its "love and hate" with the SEC, and the lawsuit with the SEC is still ongoing.

In fact, when Ripple was sued by the SEC in 2020, some people said that the Ripple incident would implicate Coinbase and prevent it from going public. Because when many exchanges removed XRP, Coinbase only said that it would suspend XRP trading first, instead of directly removing it from the market, and was sued by a customer. The customer believed that Coinbase continued to list XRP when it knew that XRP was a security and profited from the fees, so he demanded compensation. What's more coincidental is that shortly before the Ripple incident, Coinbase had just secretly submitted a draft registration statement in Form S-1 to the SEC, so these two things inevitably make people speculate too much about it.

It was not until April 14, 2021 that Coinbase's successful listing made the public feel relieved. Although the Ripple incident has not yet come to a conclusion, it is also good news that Coinbase has not been implicated. However, 5 months later, the SEC attacked again, and this time it "went straight to the dragon", claiming that it might sue Coinbase. Will this be the beginning of the US government's strict regulation of digital currency?