Digital Assets: Coinbase Unveils Institutional Crypto Lending Service

September 6, 2023 | Digital Assets, News

It appears from its filing that clients utilizing the Coinbase Prime service have already contributed $57 million to the lending program.

Coinbase has introduced a new crypto lending service tailored for institutional clients in the United States. This move is in response to filling the void created by challenges faced by companies like Genesis and BlockFi. The announcement of this crypto lending program was made discreetly through a filing with the US Securities and Exchange Commission (SEC) on September 1. Coinbase seeks exemptions for this service under its subsidiary, Coinbase Credit, Inc., and Coinbase’s CFO, Alesia Haas, is mentioned as a related individual.

Clients using Coinbase’s Prime service have already contributed $57 million to this lending program, as per the SEC filing. Prime is a comprehensive prime brokerage platform that enables institutional customers to execute trades and securely store their assets.

A company spokesperson stated that they are launching a digital asset lending program for institutional Prime clients, allowing institutions to lend digital assets to Coinbase under standardized terms, benefiting from a Regulation D exemption, which permits the sale of securities within specified limits without SEC registration. (Crypto News)

In this lending program, clients can lend mainly cryptocurrency assets to Coinbase and receive collateral exceeding the loan’s value, providing a protective measure. The company can then offer secured loans to its institutional trading clients, similar to services offered by traditional banks.

Coinbase’s goal is to modernize the financial system using crypto, providing economic freedom and opportunities. It’s worth noting that previous lending programs by the company, such as the Borrow service, and the interest-bearing Lend Program, faced challenges and legal threats, with the latter being canceled in September 2021 due to SEC concerns.

Related Story:  SEC’s Demand Would Have Sounded The Death Knell For Crypto (Brian Armstrong, Coinbase)

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