- Starting from May 10th, customers will not be able to take out any new loans through Coinbase Borrow.
- The days of Coinbase Borrow are coming to an end.
Coinbase users who used the service called Coinbase Borrow received an email on Wednesday saying that they will no longer be able to take out new loans after May 10th. With Coinbase Borrow, customers could borrow up to $1 million in fiat loans by using their bitcoin holdings as collateral. They also had to pay interest on these loans.
Coinbase has been under increased attention from regulators lately, especially after FTX, a crypto exchange, went bankrupt. The U.S. Securities and Exchange Commission (SEC) is also expected to take action against Coinbase for possible securities violations.
The decision to close down Coinbase Borrow doesn’t seem to be related to any regulatory issues for now. Someone familiar with the situation told CoinDesk that shutting down the program wasn’t influenced by any previous or ongoing problems with the SEC.
When asked by CoinDesk, a representative for Coinbase said that the reason for ending Coinbase Borrow was that there wasn’t enough demand for the service.
A representative for Coinbase said they have decided to stop offering new loans through Coinbase Borrow from May 10 because of low demand. The spokesperson mentioned that there will be no impact on outstanding loans, and customers do not need to take any action at this time.
Coinbase Borrow was launched in November 2020, with the aim of providing customers with fiat loans quickly, without having to sell their bitcoin holdings and incurring taxable gains or losses.