Coinbase Offers Crypto Loans to US Institutional Investors

Coinbase Strengthens Position in America with Crypto Loan Offering

Sep 07, 2023
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Despite regulatory uncertainty, Coinbase launches crypto loan program for US institutional investors.

Top cryptocurrency exchange Coinbase has started to provide crypto loans to institutional investors in the US.

As reported by Bloomberg, the new service is being operated through an entity known as Coinbase Credit. Prime customers have already distributed nearly $60 million through the lending program. “With this service, institutions have the option to lend digital assets to Coinbase under standardized terms in a product that qualifies for a Regulation D exemption,” stated the crypto exchange.

The move could signal the company’s intention to solidify its position in America, despite the uncertainty surrounding regulations and issues with local authorities. The offering of crypto loans appears to be a market niche that is in need of new providers, as some of the leading cryptocurrency lenders, including Celsius Network, BlockFi, and Genesis, have declared bankruptcy during the extended bear market.

Coinbase’s renewed focus on the American market comes in the midst of numerous regulatory challenges faced by the company in recent months. In 2022, the US SEC initiated an investigation, claiming that some of the digital currencies listed on the platform were unregistered securities. The attacks continued this year, with the Commission issuing a Well Notice and filing a lawsuit against the exchange.

In response, Coinbase has taken steps to expand globally, targeting Europe (specifically, the United Kingdom) and launching Coinbase International Exchange: a platform based in Bermuda that serves non-US institutional users.

In contrast to Coinbase’s efforts to reinforce its presence in the US, other companies have chosen to discontinue some cryptocurrency offerings for American clients due to the local regulatory turmoil. GameStop will withdraw its crypto wallets from the market on November 1st, while fintech firm Revolut will prohibit US-based customers from transacting with digital assets two days later. Bitstamp will prohibit Americans from staking cryptocurrencies starting September 25th, citing “current regulatory dynamics” in the States.

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