The Securities and Exchange Commission (SEC) has threatened to prosecute Coinbase Global if it proceeds with plans to establish a service that allows users to earn interest by lending crypto assets, the crypto exchange said on Wednesday.

According to Paul Grewal, the firm’s chief legal officer, the SEC has issued Coinbase a Wells notice, which is an official means of notifying a company that it plans to sue it in court. As a result, he stated that Coinbase’s ‘Lend’ product will be delayed until at least October.

In pre-market trading on Wednesday, Coinbase shares slid around 2.5% to $260 per share.

Programs that enable cryptocurrency owners to lend their coins in exchange for interest are becoming more widespread throughout the world, but some authorities, notably in the United States, are raising concerns, claiming that such products should adhere to current securities regulations.

BlockFi Inc, a cryptocurrency platform based in New Jersey, was ordered in July to halt selling interest-bearing accounts after raising $14.7 billion from investors.

The SEC’s concerns regarding Coinbase’s ‘Lend’ were based on the regulator’s belief that the product would effectively be considered a form of security. Analysts said Coinbase likely does not believe this was the case.