Crypto: Here’s why Coinbase is in hot water over crypto lending — and how the SEC is sending a shot across the bow for DeFi

Coinbase Global finds itself in a dust-up with its top regulator over lending practices that the Securities and Exchange Commission says run afoul of existing securities rules.

Brian Armstrong, the outspoken chief executive of Coinbase COIN, late Tuesday disclosed that the crypto platform is being investigated over a lending program that allows customers holding Circle’s USD stablecoin — an asset intended to serve as a digital dollar — to earn interest of around 4% APY, by lending it to Coinbase, which in turn lends it to…