Coinbase says delayed ICP issue is resolved but accounts are still suspended

Coinbase says it is continuing to investigate yesterday’s delayed withdrawals, but claim the issue has now been resolved.

However, there are still numerous reports of account suspensions and duplicated transactions.

It’s understood Coinbase’s issues were possibly connected to the sudden drop in crypto prices which saw Bitcoin fall 10% in under an hour. The negative trend continued in pre-market trade amid the overall crypto market crash. At the time of writing, Bitfinex was also down from a DDOS.

However, the outages weren’t Coinbase’s only concern on the day.

Coinbase receives Wells Notice from SEC

The San Francisco-based exchange revealed that the US Securities and Exchange Commission (SEC) threatened to take the company to court over plans to launch its new high-yield product called Lend.

According to its official blog, Coinbase received a so-called ‘Wells Notice’ from the SEC last week. A Wells Notice is a letter issued by the SEC to firms when it is planning to bring an enforcement.

The Lend program said it will give owners of USD Coin (USDC) – the second-largest cryptocurrency pegged to the US dollar – 4% interest on their holdings. Despite six months of discussion between Coinbase and the SEC, the agency is now allegedly considering the product a security offering.

The SEC offered Coinbase to submit a written letter defending Lend. Even though the SEC’s reasons for these measures were unclear, Coinbase said it would not be launching Lend until at least October, as it awaited “additional regulatory clarity”.

‘Sketchy’ behaviour coming out of the SEC

Coinbase CEO Brian Armstrong branded the SEC’s actions “sketchy” and added that Coinbase was committed to following the law.

“Sometimes the law is unclear,” he said.

“So if the SEC wants to publish guidance, we are also happy to follow that (it’s nice if you actually enforce it evenly across the industry equally btw).”

He added that when the company initially reached out to the SEC for a briefing ahead of the launch, the regulator responded by saying the Lend feature was a security.

According to Armstrong, the SEC refused to explain why they believed it was a security, “and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why”.