Electronic asset exchange Institutions in the US will be able to get cryptocurrency loans from Coinbase. The top U.S. cryptocurrency trading platform hopes to close the market gap left by the demise of businesses like Celsius, Genesis, and Blockfi with the new service.
Bitcoin Exchange Coinbase now provides institutions with cryptocurrency loans
According to Bloomberg, cryptocurrency exchange Coinbase has introduced a crypto loan service aimed at large institutional investors in the United States. The publication noted that the move aims to fill the gap created by the collapse of key platforms in this industry.
A filing with the Securities and Exchange Commission (SEC) of the United States reveals that clients of Coinbase Prime, the exchange's brokerage platform that enables institutional players to execute transactions and hold assets, have already contributed $57 million to the loan program.
"With this service, institutions can choose to lend digital assets to Coinbase under standardized terms in a product that qualifies for a Regulation D exemption," the cryptocurrency business said in a statement on Tuesday. The exchange can then issue loans to other institutions using the money it has borrowed.
The launch of Coinbase's new business venture follows the high-profile failures of lenders Celsius Network, Blockfi, and Genesis Global last year. Investors' options for borrowing money and using leverage were eventually constrained by a string of unsuccessful investments.
The largest American cryptocurrency exchange previously provided loans through the program Coinbase Borrow for individual investors, but it stopped doing so in May. Coinbase Credit, the company that ran that service, will also oversee the new institutional program.
In an ongoing crackdown on the industry that has impacted crypto commerce in the United States, Coinbase has been targeted by U.S. officials along with other cryptocurrency companies, including the largest digital asset exchange in the world, Binance.
The SEC accused Coinbase of making unregistered securities solicitations and sales in conjunction with its staking-as-a-service program in June. With the latter, consumers might swap their digital currency for returns that would help secure blockchain networks.
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