Genesis and BlockFi’s Past Troubles
Last year, both Genesis and BlockFi, two companies that provided lending services in the US, encountered significant losses. These losses were so severe that bankruptcy court proceedings were initiated.
Coinbase’s Previous Attempts
Coinbase, on the other hand, has also made efforts to offer lending programs in the past. They had a service called Borrow, provided through Coinbase Credit, Inc., which allowed retail users to obtain cash loans by using Bitcoin as collateral.
While current users can still access parts of this service, new loans are no longer available.
Furthermore, Coinbase had plans to introduce an interest-bearing Lend Program that would offer interest to users who lent USDC to the platform.
However, due to legal threats from the SEC, this program was canceled in September 2021. It was discontinued before its official launch, and no users were directly affected.
Hot Take
It is crucial for cryptocurrency platforms to carefully navigate the legal landscape to avoid potential pitfalls. The experiences of Genesis, BlockFi, and Coinbase serve as important reminders of the challenges and risks involved in offering lending services in the crypto industry.
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