Coinbase may be heading for a showdown with the U.S. Securities and Exchange Commission over its plan to offer customers a digital asset lending platform.

The crypto firm said it had reached out to the SEC ahead of the launch of Coinbase Lend but the agency had responded with “intimidation tactics” and a Wells notice indicating it intended to sue Coinbase if the product goes live.

“If we end up in court we may finally get the regulatory clarity the SEC refuses to provide,” Coinbase CEO Brian Armstrong said in a Twitter thread. “But regulation by litigation should be the last resort for the SEC, not the first.”

Chief Legal Officer Paul Grewal said Coinbase will not be launching Lend until at least October, citing the lack of “regulatory clarity.”

With Lend, Coinbase is seeking to compete with popular decentralized finance (DeFi) products such as Compound and Aave. The platform would allow customers holding a stablecoin called USD Coin to earn interest starting at 4% APY by lending it to other traders.

“Lending out digital coins has become a common way for crypto traders to earn extra money and has fueled much of the growth in the [DeFi] sector,” The Wall Street Journal reported.

Other regulators have expressed concern about digital asset lending, with the state of New Jersey ordering crypto platform BlockFi in July to stop offering interest-bearing accounts that have raised $14.7 billion from investors.

“The SEC’s tiff with Coinbase may be indicative of its move toward regulating crypto more heavily,” The Verge said.

According to Grewal, Coinbase has been “proactively engaging” with the SEC about Lend for nearly six months but the commission has indicated it would consider the product an investment contract subject to investor-protection laws.

“They refuse to tell us why they think it’s a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why,” Armstrong tweeted.

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