The leading American cryptocurrency exchange Coinbase will stop issuing new loans secured by bitcoin through the Borrow service. The exchange’s customers received an e-mail with this news on May 3. The marketplace said that the service will stop issuing secured loans on May 10. The reasons for this decision are not reported.
The Borrow service was launched in November 2021. Users could borrow up to $1 million at 9% per annum without a credit check, subject to blocking bitcoins as collateral. The changes will not affect the already issued loans and customers. The entire history of loans issued to the client will be available in the user’s personal account.
A Coinbase spokesperson told the publication Cointelegraphthat refusing to provide credit services is part of the company’s strategy: “We regularly evaluate our products to make sure we prioritize the offers that matter most to our customers.”
The changes to Coinbase’s list of services come amid a struggle between the exchange and the U.S. Securities and Exchange Commission (SEC), which filed a Wells notice in March accusing the exchange of trading unregistered securities.
Coinbase responded by urging the regulator not to take enforcement action against the company for the sake of the reputation of the SEC itself. The fact is that the leading crypto player in the US market was allowed to become a public company and start trading on Nasdaq in 2021. According to Coinbase, being listed on the Nasdaq implies that the SEC considers the company’s business to be legitimate.
In addition, just a couple of days ago, Coinbase announced the launch of an international digital asset futures exchange called Coinbase International Exchange. The license was obtained in Bermuda, the new division is registered there. This may be part of the process of preparing an alternate airfield to take business away from the US.
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