Coinbase launches institutional lending service

Coinbase is in the process of creating a new institutional lending service, according to regulatory filings and statements from the company.

A Coinbase spokesperson told CryptoSlate on Sept. 5:

“Coinbase is launching a digital asset lending program for its institutional Prime clients. 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. “

That exemption explicitly allows companies to sell securities within certain limits without registering with the U.S. Securities and Exchange Commission (SEC).

A filing submitted to the SEC on Sept. 1 suggests that Coinbase has applied for exemptions for the service through an existing subsidiary company, Coinbase Credit, Inc. The filing also names Coinbase CFO Alesia Haas as a related individual.

That same filing shows that Coinbase has sold $57 million worth of debt in advance of the service’s introduction and that indefinite future sales may take place.

Coinbase attempted other lending services

Coinbase has attempted to offer numerous lending programs in recent years. It previously provided a Borrow service through Coinbase Credit, Inc. That program allowed retail users to obtain cash loans after depositing Bitcoin as collateral. Existing users can access parts of that service, but it is no longer offering new loans.

Coinbase also previously aimed to offer an interest-bearing Lend Program that would provide interest to users who lent USDC to Coinbase. However, that program was canceled in September 2021 following legal threats from the SEC. The company canceled the service before its launch, and no users were directly affected.

Coinbase currently offers 4% interest on USDC holdings, though that offering applies to holdings and is not part of a staking or lending service.

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