Crypto Exchange Coinbase Stops Issuing Loans through Its Borrow Service

Coinbase, an American publicly traded company that operates a cryptocurrency exchange platform, has abruptly announced the closure of Coinbase Borrow, a platform that allowed US clients to use cryptocurrency as collateral for cash loans. On May 3rd, the crypto exchange informed their users, via an email, that they would no longer be able to obtain new loans through the service. Although the email did not explain this decision, it is believed that it has something to do with recent regulatory pressure on their part.

When asked about the Borrow service closure, a Coinbase spokesperson noted: “Coinbase Borrow allowed users to obtain a cash loan, in U.S. dollars, using cryptocurrency as collateral. However, it is worth noting that this feature was only available to select customers for the service.”

This announcement came amidst an ongoing tussle between Coinbase and the Securities and Exchange Commission (SEC), which fined Coinbase in August 2020, citing potential securities law violations. On top of that, recently, the company has been hit with a class-action lawsuit. However, it didn’t stop Cathy Wood’s ARK Invest from purchasing Coinbase stocks. On May 1st, the company revealed that it had acquired 5.5 million shares of Coinbase.

Earlier this week, the crypto exchange announced that it was going public through a direct listing. It is worth noting that the exchange’s public debut will be one of the biggest since Facebook in 2012.

Robert Wilson
Robert Wilson author

As the overseer of NicheBot's editorial content, I am committed to ensuring that all information published on our website is both accurate and relevant to our readers. My fervent support for the crypto industry has led me to closely monitor the developments within it since 2012, and I have contributed extensively to discussions and debates surrounding the world of Bitcoin.

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