Institutional investors in the United States can now use Coinbase's lending program.
Coinbase, the well-known cryptocurrency exchange, has unveiled a lending program for United States-based institutional investors.
The new service, Coinbase Prime, comes in the wake of several collapses in the crypto lending market and aims to offer a more reliable option for large-scale investors.
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According to a Bloomberg report published on September 5th, Coinbase Prime is structured as a comprehensive prime brokerage platform. It allows institutional participants to execute trades and hold assets securely.
The lending service is regulated under a Regulation D exemption, offering a standardized framework for institutions opting to lend their digital assets to Coinbase.
In a related development, filings with the US Securities and Exchange Commission (SEC) revealed that since its initial sale on August 28th, the lending service has attracted five investors and accumulated $57 million in investments as of September 1st.
The unveiling of Coinbase Prime follows the suspension of the Coinbase Borrow program in May 2023. This new institutional lending initiative is managed by Coinbase Credit, the same division responsible for the discontinued Coinbase Borrow program.
This development occurs in the backdrop of a legal skirmish between Coinbase and the SEC. The regulatory agency had charged Coinbase over the alleged sale and offering of unregistered securities related to its crypto-staking services.
Although Coinbase vehemently disagreed with the SEC's interpretation, the crypto exchange was forced to suspend its staking program in California, New Jersey, South Carolina, and Wisconsin during the legal proceedings.
As Coinbase Prime launches amid a challenging backdrop for the crypto lending industry, the service aims to bring reliability and regulation to institutional investors. While still in its early stages, the new platform signifies Coinbase's strategic move to capture a more resilient segment of the lending market.
