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Coinbase, the eminent US-based cryptocurrency exchange, astounded numerous users with its latest verdict. The cryptocurrency platform proclaimed the cessation of new lending through its loan service.
Coinbase Borrow Discontinued
Coinbase, the titan of cryptocurrency exchanges, recently disclosed that its crypto loan service, Coinbase Borrow, will be inaccessible as of May 10. The platform clarified that this resolution will not affect customers’ existing outstanding loans.
This development arises amidst Coinbase’s ongoing conflict with the US Securities and Exchange Commission (SEC). The parties are presently engaged in litigation over securities regulations and cryptocurrency exchange concerns. The SEC alleges that Coinbase contravened federal securities laws by selling unregistered securities, while the exchange counters that the regulator lacks sufficient clarity on cryptocurrency regulations.
“In our routine assessments of the products we provide, we ensure we prioritize services our customers value most,” a Coinbase spokesperson informed Bloomberg regarding Coinbase Borrow’s suspension.
Coinbase Borrow, a favored crypto lending service, offered loans of up to $1 million against Bitcoin pledged as collateral. However, it was solely accessible in specific US states. Utilizing Coinbase Borrow, customers could obtain approximately 40 percent of their Bitcoin collateral at 8.7 percent annual interest.
Coinbase, SEC, and Legal Obstacles
Cryptocurrency exchange Coinbase has recently been entangled in a legal dispute with the US regulator SEC, asserting that its platform’s services are entirely lawful. Besides the SEC, several Coinbase investors have also initiated lawsuits against the exchange, alleging insider trading and unethical profiteering from the cryptocurrency listing process.
An additional lawsuit contends that Coinbase exploited customers’ biometric data, encompassing facial and fingerprints, without consent, thereby infringing on their privacy.
