Coinbase to halt Bitcoin-backed lending via Borrow

From May 10, Coinbase will cease Bitcoin-backed lending via the Borrow service. Affected clients of the crypto exchange have been notified, according to Cointelegraph.

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Users could borrow up to $1 million at 9% annual interest without a credit check, provided they lock up their first cryptocurrency as collateral. The loan-to-value ratio (LTV) was up to 40%.

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The service was launched in November 2021 as a convenient way to raise fiat financing without selling Bitcoin and the associated tax consequences.

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The reasons for the cessation were not disclosed.

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We regularly assess our products to prioritise those in which our customers are most interested, the platform’s representatives said.

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Earlier the U.S. Securities and Exchange Commission (SEC) sent a notice to the exchange regarding an investigation into listing procedures on the platform and its products — Coinbase Prime, Coinbase Wallet and staking service Coinbase Earn.

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In April the company responded to the regulator’s complaint, stating it was prepared to ‘vigorously defend itself’. Platform representatives also noted that the SEC investigations could damage its reputation.

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Coinbase recently launched an international futures exchange for digital assets — Coinbase International Exchange.