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The leading cryptocurrency exchange – Coinbase – has reportedly started offering crypto loans to US institutional investors.
The move could signal the company’s willingness to strengthen its position in America despite the regulatory uncertainty and the issues with local watchdogs. Recall that the US SEC filed a lawsuit against Coinbase in June, accusing the trading venue of breaching several rules and offering trading services with unregistered securities.
Capitalizing on the Vacuum
Based on a recent Bloomberg coverage, the firm’s new offering is operated through an entity called Coinbase Credit. The source also informed that Prime customers have already distributed almost $60 million in the lending 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 crypto exchange explained.
Offering crypto loans seems to be a market niche that needs new providers since some of the leading cryptocurrency lenders filed for bankruptcy during the prolonged bear market. Such examples are Celsius Network, BlockFi, and Genesis.
Re-focusing on the American market comes on the back of numerous regulatory hurdles that Coinbase has faced in the past several months in the world’s largest economy. The US SEC is the agency that caused many of the problems for the exchange in its homeland.
It launched an investigation in 2022, alleging that some of the digital currencies listed on the platform are unregistered securities. The attacks continued this year, with the Commission issuing a Well Notice and lawsuit against the marketplace.
As such, Coinbase has taken steps to expand globally, setting eyes on Europe (more specifically, the United Kingdom). It also introduced Coinbase International Exchange: a platform based in Bermuda that serves non-US institutional users.
These Firms Will Halt Crypto Services for Americans
Contrary to Coinbase, which doubled down on its presence in the US, others have decided to terminate some cryptocurrency offerings for American clients due to the local regulatory chaos.
The gaming merchandise retailer GameStop disclosed that it will remove its crypto wallets from the market on November 1, whereas the fintech firm Revolut will bar US-based customers from dealing with digital assets two days later.
Bitstamp revealed that it will disallow Americans to stake cryptocurrencies from September 25, citing the “current regulatory dynamics” in the States.