Coinbase Backs Down Against SEC; Robinhood Tests Wallet

Coinbase has decided not to launch its lending product after CEO Brian Armstrong said earlier this month that the Securities and Exchange Commission threatened to sue the cryptocurrency exchange if it released Lend, which planned to offer a 4% annual yield to people who lent their USD Coin cryptocurrency to Coinbase.

The move is a big win for the SEC. Although the SEC has talked more about crypto regulations than proposed rules, its impact on Coinbase shows that sometimes a threat is all you need. It’s also a signal to other crypto companies, including exchanges, that they’ll have to step in line with what the regulator wants.