Key takeaways:
- Coinbase has launched a crypto loan service for institutional investors in the US to take advantage of the market’s significant failures.
- Since the initial transaction took place on August 28, Coinbase users have already put $57 million into the lending program.
In order to take advantage of the market’s significant failures, cryptocurrency exchange Coinbase has launched a crypto loan service for institutional investors in the United States.
According to a report from Bloomberg on September 5, Coinbase has covertly introduced Coinbase Prime, an institutional-grade crypto lending platform, to US clients. A full-service prime brokerage platform, Coinbase Prime, enables institutions to execute trades and maintain assets. Apparently, the company stated in the statement:
“With this service, institutions can choose to lend digital assets to Coinbase under standardized terms in a product that qualifies for a Regulation D exemption,”
Since the initial transaction took place on August 28, Coinbase users have already put $57 million into the lending program, according to a filing with the US Securities and Exchange Commission (SEC). By September 1, the offering had attracted five investors.
Following the stoppage of fresh loan issuance on Coinbase Borrow in May 2023, Coinbase has now launched a new cryptocurrency lending platform. Users of the program will be able to receive up to $1 million using Bitcoin as collateral. The same organization that oversees Bitcoin Borrow also runs the new institutional program, Coinbase Credit.
The announcement follows the US SEC’s months-long investigation into Coinbase’s alleged offering and sale of unregistered securities in relation to the company’s crypto starking services, which allow customers to receive returns on handing the platform their cryptocurrency.
The exchange disagreed vehemently with any claims that its staking services were securities in response to the SEC’s accusations, it claimed.
Ultimately, Coinbase was forced to suspend its staking program in California, New Jersey, South Carolina, and Wisconsin while the legal process was ongoing.
Last year, the crypto lending sector experienced a severe crisis, with well-known firms like BlockFi, Celsius, and Genesis Global failing due to a lack of liquidity brought on by the bear market of 2022.
