Prominent crypto exchange Coinbase has launched a crypto lending service targeted at institutional investors in the United States. According to a Tuesday report by Bloomberg, the largest American exchange seeks to fill the void created by the collapse of crypto lending firms such as BlockFi, Genesis Global, Celsius, etc.
Coinbase Lending Service Opens With Massive Investment
Based on Bloomberg’s report, the Coinbase lending program is off to a good start, attracting $57 million in investment from Coinbase customers. This information was revealed in a US Securities and Exchange Commission filing.
The Coinbase lending service allows institutional clients to lend funds – in the form of crypto assets – to exchange.
These assets are collateralized by other digital assets, with a higher value protecting against possible market losses. With these funds, Coinbase then offers loans to other institutional clients.
In addition, Coinbase’s new product allows its clients to lend cryptocurrency in an arrangement that the exchange claims qualifies for Regulation D exemption under US securities laws.
For context, this means that Coinbase can raise capital for its lending program by selling equity or securities without needing to file a registration of these assets with the Commission.
Interestingly, this new service does not represent Coinbase’s first venture into the crypto lending space.
In June 2021, the American crypto exchange proposed the introduction of the Lend feature designed to allow retail investors to earn an APY of 4% by investing in USDC, which other verified customers can borrow.
However, the exchange had to terminate the project in September 2021 due to several legal objections from the SEC. In May 2022, Coinbase also
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Author: Semilore Faleti
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