Coinbase Launches New Crypto Lending Service For Institutional US Clients
Coinbase (COIN) has unveiled a new crypto-lending service specifically designed for institutional clients in the United States. This move comes as Coinbase aims to fill the void left by the setbacks experienced by firms like Genesis and BlockFi.
Coinbase's crypto lending program was announced discreetly through a filing with the US Securities and Exchange Commission (SEC) on September 1.
The filing indicates that Coinbase has sought exemptions for this service under an existing subsidiary, Coinbase Credit, Inc., and names Coinbase's CFO, Alesia Haas, as a related individual.
In support of this initiative, clients utilizing Coinbase's Prime service have already contributed $57 million to the lending program, as indicated in the SEC filing.
Coinbase Prime, a full-service prime brokerage platform, allows institutional customers to execute trades and securely store their assets.
According to a Coinbase spokesperson on September 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."
The Regulation D exemption permits companies to sell securities within specified limits without the need for registration with the US Securities and Exchange Commission (SEC).
With this lending program, clients can lend funds, mainly cryptocurrency assets, to Coinbase and receive collateral exceeding the loan's value. This over-collateralization acts as a protective measure.
Coinbase can then offer secured loans to its institutional trading clients, similar to the prime brokerage services provided by traditional banks in the financial sector.
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