Coinbase will stop issuing new loans through its Coinbase borrow service, a program that allows customers to borrow money using Bitcoin as collateral.
Coinbase Borrow Service to be Stopped
The US-based exchange’s customers who took advantage of the program, which allowed them to borrow interest-bearing fiat loans of up to $1 million against up to 30% of their Bitcoin holdings, received an email on Wednesday informing them that the last day to obtain new loans was May 10. The corporation states that unpaid obligations owed by customers won’t be impacted.
About Coinbase Borrow
Loans from Coinbase Borrow are only made in a few US states. Despite ongoing regulatory uncertainty regarding the exchange, the company is scheduled to release its quarterly earnings report on May 4. The closure of Coinbase Borrow appears to be unrelated to any enforcement action for the time being, according to the CoinDesk report.
About the SEC and Coinbase Tensions
Coinbase is anticipating enforcement action from the US Securities and Exchange Commission (SEC) for suspected securities violations as a result of increased regulatory attention following the collapse of cryptocurrency exchange FTX.
In its response to the Wells warning from the SEC, Coinbase emphasizes that it operates within the law and promotes open discussion on a realistic future for the cryptocurrency industry. The business is nonetheless ready to defend its stance in court in spite of the regulatory worries. It considers this unnecessary, though, and would prefer to have a real conversation on a workable course for the cryptocurrency industry’s future.
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