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Crypto Lending, Coinbase, & The SEC

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3 weeks ago

As many have seen recently, the SEC is going after Coinbase for preparing to launch a lending platform. There are other platforms like Blockfi who are also seeing restrictions in the US. Let’s dive into this and why I don’t think it matters that CeFi is having problems.

Many other platforms like Nexo, Celsius, and Crypto.com are likely to face the same fate and the point is simply that centralized financial platforms or CeFi will always end up with issues like these. A lot of this comes back to one simple issue. Are you leaving your cryptocurrency on exchanges or platform that control your cryptocurrency?

 

If you are leaving your crypto on these lending platform because you feel they are “safe,” then think again. Your earnings may all be taxed and you may run into many issues later down the road. This is why it’s so important to stake cryptocurrency from a wallet you control or to provide liquidity anonymously through smart contracts. This makes all the difference for ownership, security, taxation, and more.

 

By the way I am in no way recommending you do anything illegal tax wise, all I am saying is that you don’t have the option with anything in CeFi while there are many options out there in the world of DeFi.

 

This article and my thoughts are less about the case itself and more so on the general sentiment around these platforms. If we lose them, it’s not bad for the industry at all, in fact you’re not even making as much as you could lending as you could through other ways to earn passive income from cryptocurrency that you can in a decentralized way. Decentralization, anonymity, privacy, etc. are the values and the ethos of cryptocurrency, so sticking to that and not allowing centralized platforms to run everything is ideal.

 

Platforms and services like stock exchanges that sell direct crypto (which really don’t) like Robinhood or Wealthsimple as well as payment processors like Paypal who let you only buy and sell but not transact freely or truly own your cryptocurrency only hold people back from what is meant for. I thank them for the publicity, but you need to understand that all these centralized financial services are the original problem that we are solving with cryptocurrency.

 

What do you think about crypto lending? How do you earn crypto passively? What are your thoughts on CeFi and Defi? What do you think about the SEC case against Coinbase? Let me know what you think about this in the comments below and don’t forget to subscribe!

 

*Disclaimer: This is not financial advice and is purely for entertainment purposes. What you see, hear, or read is my personal opinion, and any statements made are based on my views and should not be misconstrued as fact. My crypto portfolio may or may not be simulated*

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Comments

Coinbase CEO Brian Armstrong criticizes the SEC, stating that the SEC is not transparent about its cryptocurrency policies and is using intimidation tactics. very nice article i read it with care..

$ 0.00
1 week ago

I have been in the stock market for 30+ years dealing with the government, regulations, the SEC, banks and financial institutions, and taxation for years and it never stopped me from making money or being able to do with my money what I mostly see fit.

And there are ALWAYS workarounds.

Not dissing the IDEA of what crypto wants to do or is trying to do. Never my aim. I LIKE crypto. That is why I invest in it and keep up with it, and maintain an interest in what it is and what it does.

But I also think it is a bit naive to believe that somehow it will completely wipe out at least SOME level of government control over it. I just don't think that's realistic. We are talking about economic systems established for hundreds of years (if not thousands), that has an estimated world value of $1.2 quadrillion USD. That's a lot of money, and something I think crypto will have a difficult time competing with to totally wipe it out.

Just my two cents. I always enjoy your commentary and find it very helpful, useful, and enlightening of course.

$ 0.01
3 weeks ago

I think crypto lending is a good idea to earn passively. I have tried it before, but currently I have decided to stake $AWC from https://atomicwallet.io/ for a good APR.

$ 0.01
3 weeks ago

I think it is a bit more than that. Until now, the main advantage of crypto is that they innovate faster than the govt regulate, but they will catch up eventually and then the real fight will begin. The data is collected and it will be used. Past week Twitter asked me nicely if i want to tell them my BTC and ETH wallet. Seriously.

$ 0.01
3 weeks ago

I been to crypto lending many times, but I was nervous at first because we really can't control what's going to happen to that money you lend. Then I quit, re-invest into compounding and other stuff. Great idea sir, you always gives a lot of point of views in your articles. Thank you!

$ 0.00
3 weeks ago

Maybe I'm thinking too simplistically but I don't see cryptocurrency as any different from any other form of currency INVENTED BY MANKIND. Get real! Money don't grow on trees. It was invented! It's just a convenient means of transacting business, buying goods and services, giving gifts, etc.

As for the SEC? It's the government and they have to at least show We the People that they are serious about protecting US from fraud! Sure! They are going after the Big Guys! But what's at stake here? The Big Guys can do a lot more damage than the little guys!

This is a new area that has potential to have a great impact on the economy. Hopefully a positive impact. It's better that the SEC look into their dealings and question their activities NOW, than wait until _____. Oops! Another Bernie Madoff has made off with the hard-earned money of hard-working people!

P.S. I appreciate your articles. They provide information and insight.

$ 0.06
3 weeks ago