Coinbase Global (NASDAQ:COIN) stock drops 3.1% in premarket trading after the cryptocurrency exchange app says it received a notice from the Securities and Exchange Commission that it may sue Coinbase over its planned Lend product. The company announced the product and has a waitlist for it, but hasn't yet launched Lend. Under the program, customers would lend the USCoin (USDC-USD) they hold on Coinbase's platform and would earn interest from their participation in the program. Now, the SEC is telling Coinbase (COIN) that it will sue the company if they proceed with launching the program, telling the company that the Lend feature is a security. The company asked the SEC for the reasoning behind the determination, Coinbase CEO Brian Armstrong said in a string of tweets. "They refuse to tell us why they think it's a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our
