Coinbase’s institutional-grade crypto lending platform, Coinbase Prime, is now reportedly available to US-based investors
Cryptocurrency exchange Coinbase has quietly rolled out a crypto lending service for institutional investors in the United States, as reported by Bloomberg on Sept. 5.
The firm’s recent filing with the US Securities and Exchange Commission shows that the offering, which had attracted five investors as of Sept. 1, has already accumulated $57 million in its US lending program.
Coinbase Prime is a comprehensive premium brokerage platform that lets institutions execute trades and custody crypto and other digital assets.
With the new offering, institutions can lend digital assets to Coinbase under standardized terms. Reportedly, the investing product qualifies for a Regulation D exemption. Regulation D exempts select companies from the registration requirements associated with a public offering. That provides smaller companies with access to investment capital, letting them offer specific types of private placements.
Coinbase’s new institutional program is operated through the same entity which issued retail loans under the Coinbase Borrow program – Coinbase Credit. In May 2023, Coinbase stopped issuing Bitcoin-backed loans through its Borrow service, which allowed users to borrow up to $1 million with no credit check.
Commenting on the notice, a Coinbase spokesperson explained that the company is “prioritizing the offerings that … customers care about most.” The absence of more details led to public speculations about the profit losses connected to the Borrow service.
However, today, the firm might want to fill the market gap caused by the collapse of crypto lending firms such as BlockFi and Genesis.
The move takes place at a challenging time for the crypto exchange which was sued by the US Securities and Exchange Commission (SEC) for allegedly unregistered offer and sale of securities in connection with its staking-as-a-service program earlier this year.
Despite the ongoing legal battle, Coinbase has recently managed to gain regulatory approval to operate a Futures Commission Merchant (FCM) and offer eligible US customers access to crypto futures.
