Coinbase, the largest US cryptocurrency exchange, has decided to suspend new loans offered through Coinbase Borrow, its service that allows people to borrow in exchange for Bitcoin.
Coinbase stated in a statement that the loan service in exchange for BTC will end from May 10.
Coinbase added that the suspension decision will not have any impact on previously used loans that are still being paid.
Speaking to Bloomberg, a Coinbase spokesperson said:
“From May 10, 2023, customers will no longer be able to obtain new loans with Coinbase Borrow.
However, it has no impact on your outstanding loans and no action is required at this time. You will still have access to your credit history and the full Borrow dashboard.
We regularly evaluate our products to make sure we prioritize the offerings our customers care about most."
Credit service Coinbase Borrow provides loans of up to $1 million against Bitcoin collateral in select US states only.
According to the terms set by Coinbase, customers could borrow up to 40% of the value of Bitcoin in their accounts at an annual interest rate of 8.7%.
Coinbase CEO Brian Armstrong described the Coinbase Borrow service as a service developed to expand the cryptocurrency economy.
Coinbase made this decision amid ongoing regulatory pressure. Because the SEC accused Coinbase of violating securities law and sent the exchange a Wells Notice.
*Not investment advice.