Cryptocurrency broker Coinbase hit back at the Securities and Exchanges Commission (SEC) on Wednesday after it was threatened with an enforcement action. Coinbase was initially moving toward starting a new interest-bearing product for consumers before it received word of the SEC’s plans to sue.

Coinbase Chief Legal Officer Paul Grewal said the company was caught “off guard” by the announcement. He added that for months Coinbase executives worked to contact the SEC to no avail.

After news of the SEC action broke, shares in the company dropped 3% during pre-market trading, according to CNBC.

In a blog post on Tuesday, Grewal disputed the SEC's characterization of Coinbase's lending product as a security, but it nonetheless pushed for more information on what informed the agency's viewpoint.

CEO Brian Armstrong took to Twitter where he criticized the agency for being unclear about its guidance and reasoning related to cryptocurrency lending programs, something he said is being done across the industry today.

Armstrong explained that the SEC initially took a view that any lending program was a financial security, a position he questions. However, he insists Coinbase sought more guidance to understand the agency’s view. Instead, he says the company was only hit by demands for documents and employee interviews that were met only to be hit with a lawsuit.

By his own account, Armstrong said the SEC was the only regulator that refused a meeting with him during a recent trip to Washington, D.C. The reason given he says was that the agency was not meeting with any cryptocurrency companies. He later criticized the SEC for what he called “intimidation tactics” by refusing to be transparent or consistent with its opinions for his industry. 

“Ostensibly the SEC's goal is to protect investors and create fair markets. So who are they protecting here and where is the harm?” wrote Armstrong.

Armstrong argues that it is unfair for Coinbase to be singled out by the SEC for any enforcement action when cryptocurrency lending has been taking place across the industry. Other competitors however, like New Jersey-based BlockFi, have been hit by regulatory pressure from state-level agencies that are concerned over its own interest-bearing products.

The regulators’ arguments appear to resemble those Armstrong said were used against Coinbase, namely that they were engaged in selling unregistered securities to consumers.

Coinbase has not withdrawn plans to launch its own lending product after the SEC announcement, but it has pushed the start date back into October. The product it planned to launch would allow users to earn a 4% annual yield on a so-called stablecoin. This would allow Coinbase to lend those funds to verified borrowers while maintaining guarantees that the coin is backed by the company and is redeemable for $1.