The Coinbase Borrow service will no longer offer new loans from the US-based cryptocurrency exchange.
Users in a few US jurisdictions can borrow up to $1 million in fiat money with Coinbase Borrow without having their credit checked. With an annual interest rate of 8.7%, users could pledge up to 40% of the bitcoin in their accounts as security for the loan.
The exchange informed clients that the service would be discontinued as of May 10 in an email delivered on May 3. Customers have been informed that they do not need to take any additional action, and there will be no impact on outstanding debts.
This action coincides with what many have perceived as a regulatory onslaught on cryptocurrency companies in the US since the year’s beginning. Coinbase received a Wells notice from the US Security and Exchanges Commission (SEC) in March.
Since then, on April 24, Coinbase has filed a lawsuit against the SEC, requesting that the regulator respond to a petition from July 2022 questioning whether the cryptocurrency business will be governed by current SEC regulations.
On April 28, the exchange then unveiled its “Stand With Crypto” non-fungible token (NFT) campaign to encourage the adoption of pro-crypto policies.
The termination of Coinbase’s borrowing business has not been officially announced, so any relation to regulatory monitoring is merely speculative at this point.
According to the exchange, the decision was made after carefully examining its products to make sure that clients could access the services they valued the most.
Coinbase International Exchange debut This choice also follows the May 2 launch of Coinbase International Exchange (CIE), the company’s worldwide derivatives platform.
The business joined Gemini, another significant cryptocurrency exchange, which had just introduced a comparable platform. As it prepares to release its first quarter results on May 4, Coinbase has made a number of important actions. The company’s COIN prices, which peaked in March at $84 and are now down progressively by nearly 30% to $48.88 since mid-April.
