Coinbase Global to Launch Asset Lending Platform for Institutions
Coinbase Global, the second largest cryptocurrency exchange by market cap, is set to debut a digital asset lending platform specifically catering to large institutional investors on Sep. 5.
The exchange has successfully secured $57 million in funding for this venture, as detailed in a regulatory filing.
Coinbase Prime, the upcoming platform, aims to serve as a comprehensive prime brokerage service tailored for institutions based in the United States.
It offers clients the ability to trade and securely store tokens. Additionally, institutions can choose to lend their digital assets to Coinbase under regulated terms, qualifying for a Regulation D exemption.
Swift Launch and Regulatory Motivation
Coinbase’s filing with the Securities and Exchange Commission (SEC) reveals that the first sale occurred on Aug. 28, and within just four days, Coinbase Prime attracted five investors.
The platform’s introduction is a response to regulatory challenges arising from the SEC’s accusation against the exchange for selling unregistered securities via its crypto-staking services.
Coinbase firmly disputes the SEC’s classification, asserting that its staking services should not be considered securities.
As a consequence, the exchange had to suspend its crypto-staking service in four states while the legal proceedings were ongoing.
This development comes on the heels of the industry downturn in 2022, which also adversely affected the crypto lending sector, leading to the bankruptcy declarations of companies like Celsius and Genesis Global.
The launch of the Coinbase Prime platform effectively addresses this significant market gap.
Coinbase has recently achieved industry victories, including approval to offer cryptocurrency futures to U.S. retail customers in August.
Hot Take
With Coinbase Global’s introduction of the Coinbase Prime platform, institutions now have access to a specialized digital asset lending service, bolstering the cryptocurrency industry’s infrastructure and providing institutions with enhanced options for trading, storing, and lending their digital assets.
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