Coinbase is taking advantage of the crypto lending market after big players like BlockFi and Genesis Global exited the scene.
Last year, the crypto lending market faced challenges when big players like Genesis Global and BlockFi ran into trouble. Coinbase saw an opportunity and has now launched its own crypto lending service for institutional investors in the United States.
According to a recent filing with the U.S. Securities and Exchange Commission (SEC), customers of Coinbase Prime, the exchange’s full-service Prime brokerage platform, have already invested over $57 million in this lending program. Coinbase Prime allows institutions to trade and secure assets.
In a statement, Coinbase explained, “With this service, institutions can choose to lend digital assets to Coinbase under standardized terms, which qualifies for a Regulation D exemption.”
On the same day, Coinbase also announced a $180 million bond buyback program. Initially, they started with a $150 million cap, but due to increased interest, they expanded the total amount allocated for repurchasing 2031 bonds to $180 million.
Coinbase Ventures into Crypto Lending
Coinbase has ventured into lending before. In May, they stopped offering new loans through a service called Coinbase Borrow, which allowed regular people to borrow against their Bitcoin holdings. Now, they’re offering a similar service for institutions, called Coinbase Credit.
In June, the SEC (U.S. Securities and Exchange Commission) accused Coinbase of selling securities through its staking-as-a-service program without registering. This program let users delegate their coins to Coinbase to earn rewards for helping secure blockchain networks. Some U.S. states asked Coinbase to stop this service.
Notably, many big crypto lending platforms like Celsius Network, BlockFi, and Genesis Global faced financial trouble in the past year. They took high risks that didn’t pay off, leading to financial difficulties that reduced options for borrowing and investing.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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