Lending Bitcoins and the SEC

As always, Matt Levine provides the best, clearest explanation of how finance works. His explanation for why Coinbase's Lend product is legally doomed so long as the Howey test determines the scope of SEC regulation is succinct, clear, and amusing to read.

And then he discusses why the alternate regulator- the FDIC or OCC to regulate as a savings account- would be much much worse for Coinbase (100% equity capital requirements for all crypto would kill the company dead), and shows why this Lend program probably will never be available to the American general market. (He doesn't discuss in this article, but has in previous ones, that a possible exception to the regulations exists for "sophisticated investors"- those with more than 1 million in financial assets or who have passed certain exams.)