Coinbase launches its crypto lending platform for institutional investors, Coinbase Prime. The platform is designed to serve US institutional investors, facilitating seamless transaction executions and robust asset custody. The platform operates under the same umbrella as Coinbase Credit, which also oversees Coinbase Borrow, a platform that suspended its new loan offerings in May 2023.
Through this service, institutions can choose to lend digital assets to Coinbase under standardized terms within a product that benefits from an exemption under Regulation D.
Statements collected by Blomberg
By leveraging the Regulation D exemption, the newly launched service allows institutions to lend digital assets to Coinbase under standardized conditions. This strategic launch represents a significant effort from Coinbase to secure a position in the expanding crypto lending space, despite a market that saw substantial companies go bankrupt amidst a liquidity crisis the previous year.
Positive Reception and Legal Controversies
As evidenced by a recent filing with the US Securities and Exchange Commission (SEC), the lending program has attracted $57 million in investment since its initial sale on August 28th. Garnering interest from five investors by September 1st, the program signals a promising start, offering loans up to $1 million backed by Bitcoin collateral.
However, the road has not been without obstacles for Coinbase. The introduction of this lending product follows a series of legal confrontations with the SEC regarding the alleged sale and offering of unregistered securities related to its crypto staking services. Despite vigorously contesting these allegations, Coinbase had to suspend its staking program in multiple states amid ongoing legal proceedings.