Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
Cryptocurrency exchange Coinbase has introduced a crypto lending service aimed at institutional investors in the United States, reportedly seeking to take advantage of significant failures within the crypto lending sector.
Coinbase has discreetly launched an institutional-grade crypto lending platform, Coinbase Prime, for U.S. investors, as reported by Bloomberg on Sept. 5. Coinbase Prime serves as a comprehensive prime brokerage platform that enables institutions to execute trades and manage assets.
“With this service, institutions can opt to lend digital assets to Coinbase under standardized terms in a product that qualifies for a Regulation D exemption,” the company reportedly stated in its announcement.
As per a filing with the U.S. Securities and Exchange Commission, Coinbase clients have already contributed $57 million to the lending initiative since the first sale took place on Aug. 28. The offering had drawn five investors as of Sept. 1.
Data from a SEC filing by Coinbase Credit. Source: Coinbase SEC Filings
Coinbase did not promptly reply to Cointelegraph’s inquiry for comment.
Related Posts
The introduction of Coinbase’s new crypto lending product follows the suspension of new loan issuance on Coinbase Borrow in May 2023. This program is intended to allow users to obtain up to $1 million through Bitcoin (BTC) collateral. The new institutional initiative is managed by Coinbase Credit, the same entity overseeing Coinbase Borrow.
Related: SEC vs. Coinbase: New lawyer Patrick Kennedy joins fight
This announcement comes months after the U.S. SEC charged Coinbase with the alleged offering and sale of unregistered securities related to its crypto staking services, which enable users to earn yields by providing their crypto to the platform. The exchange contested the SEC’s claims, asserting that it fundamentally disagrees with any allegations that its staking services constituted securities.
Coinbase ultimately had to suspend its staking program in four states, including California, New Jersey, South Carolina, and Wisconsin, while the legal proceedings were ongoing.
The crypto lending sector faced a significant crisis last year, with major firms such as BlockFi, Celsius, and Genesis Global declaring bankruptcy due to liquidity issues stemming from the 2022 bear market. Some crypto advocates suggested that the crypto lending industry must learn from these failures and address challenges related to short-term assets and liabilities.
Magazine: Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in
