Coinbase Global Inc. Launches Crypto Lending Service for US Institutional Investors
Coinbase Global Inc. has introduced a specialized crypto lending service for large US institutional investors. This move comes in the wake of several high-profile bankruptcies in the crypto lending industry, including BlockFi Inc. and Genesis Global Holdco.
Coinbase Lending Targets Deep-Pocketed Investors
In a recent filing with the US Securities and Exchange Commission (SEC), Coinbase disclosed that its Prime customers have already invested $57 million in the lending program. Coinbase Prime, a comprehensive prime brokerage platform, enables institutions to trade and custody assets seamlessly.
On Tuesday, Coinbase clarified that institutions can lend digital assets to the platform under standardized terms that qualify for a Regulation D exemption.
Coinbase’s Return to Institutional Lending
This institutional lending service marks Coinbase’s reentry into the lending sphere after discontinuing new loans through Coinbase Borrow, a service for retail investors. However, Coinbase has faced challenges, including being charged by the SEC for an unregistered offer and sale of securities related to its staking-as-a-service program.
Tumultuous Times for Crypto Lenders
Several crypto lenders, such as Celsius Network, BlockFi, and Genesis Global, have experienced bankruptcy due to risky bets that did not pan out. These failures have limited borrowing and leverage options for investors.
Criticism and Regulatory Victories for Coinbase
Tuur Demeester, editor-in-chief at Adamant Research, raised concerns about Coinbase venturing into lending. However, Coinbase recently obtained approval to offer cryptocurrency futures to US retail customers, marking a significant regulatory achievement.
Positive Moves for Coinbase
Coinbase has increased and extended a debt tender offer, and its CEO believes that market sentiment toward the company does not reflect its positive initiatives. These strategic actions demonstrate Coinbase’s commitment to providing diverse offerings to institutional clients.
Hot Take: Coinbase Navigates Challenges and Seizes Opportunities in Crypto Lending
Coinbase’s foray into crypto lending for institutional investors showcases its determination to navigate the ever-changing landscape of the industry. By offering tailored services and adapting to regulatory requirements, Coinbase positions itself as a leading player in the crypto lending space.
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