It appears from other comments that the CoinBase Lend program is not simply a loan by depositors to others. According to other posts, CoinBase is planning on pooling the assets of its depositors and then creating loans from that pool.
That my friends, is a different kettle of fish, for the pooling of assets for investment purposes is in fact a security. If that is what they are planning on doing, the interest in the pool meets the Howey test – an investment of money in a common enterprise, with the expectation of making a profit from the efforts of others. The customer’s interest in the pool would be a security.
Adam Levitin has an excellent analysis of the plan at the Credit Slips blog.
Other posters are mocking the General Counsel of CoinBase for “whining” about the SEC‘s lack of transparency in the Wells Notice. I suspect that those posters have never dealt with an SEC Wells Notice, which quite often is simply a statement that the Staff intends to recommend enforcement action for violation of a particular statute.
While it is true that a Wells Notice comes after an investigation, in which the target participated, and after discussions with the Staff, the often cryptic language presents a problem for the target in deciding whether to respond and how to respond. Assuming too much raises additional questions, not saying enough dooms the response to failure.
Rather than mock the GC, we should be applauding the public posting objecting to the Wells Notice and the lack of clarity that apparently exists in this particular notice.