Coinbase Stock COIN is down 11% at press time, according to Nasdaq data, with the pre-market drop sending the price down to $258.50.
Coinbase’s shares began to fall in tandem with the wider crypto market drop, as the exchange experienced yet another service disruption, causing transactions to be delayed or canceled.
Bitcoin dropped as much as 12% on the same day El Salvador made bitcoin legal tender.
Many other popular cryptocurrencies, such as Ethereum, Cardano, Binance Coin, and Polkadot, all suffered double-digit losses as roughly $300 billion was wiped out of the market in a couple of hours.
The San Francisco-based exchange claimed that the Securities and Exchange Commission (SEC) of the United States is threatening to sue the firm over its intentions to launch a new high-yield product called Lend.
Owners of USD Coin (USDC), the second-largest cryptocurrency tied to the US dollar, will receive 4% interest on their holdings under the Lend scheme. Despite six months of talks between Coinbase and the SEC, the agency now appears to view the product as a security offering. This implies that the product must be registered with the agency as such.
Coinbase’s chief legal officer, Paul Grewal, wrote in a blog post on Tuesday night, “A healthy regulatory relationship should never leave the industry in that kind of position without explanation.”