Amid the increased regulatory pressure on Coinbase from the SEC, the exchange is considering pulling the plug on its Coinbase Borrow system. The program allowed users to borrow fiat loans up to a million dollars against 30% of their Bitcoin holdings, and it is currently expected that the last day of getting new loans is May 10. Considering how Coinbase is having a stiff relationship with the regulators, the firm is anticipating an enforcement action over alleged securities violations.
BREAKING: #Coinbase announced in a shocking notice to its users that beginning on May 10, 2023, Coinbase will be abruptly terminating its Coinbase Borrow service that allowed users to take out fiat loans with cryptocurrencies set as collateral. pic.twitter.com/3ZjcudDiy5
— The Cardano Times (@TheCardanoTimes) May 3, 2023
It can be departed upon, whether or not increased enforcement action had anything to do with the closure of the Coinbase Borrow program or not. Despite the varying opinions, an authentic source highlighted how the program had nothing to do with both current or past issues with the SEC.
However, despite the closure being put into effect, Coinbase reassured its customers that there would not be any impact on their funds. At the same time, the firm clarified that no possible action is required from the customers at this point either.
A spokesperson from Coinbase stated:
“We regularly evaluate our products to ensure we’re prioritizing the offerings that our customers care about most. Effective May 10, we will stop issuing new loans through Coinbase Borrow. There is no impact on customers’ outstanding loans, and no action is required from them at this time.”
Coinbase Continues to Expand Despite Restrictions
Previously, there were plans for Coinbase to move its base of operations overseas, and the main reason behind doing so was increased regulatory pressure from the SEC. Just recently, the exchange announced the launch of Coinbase International Exchange, a platform crafted to cater to the needs of institutional investors. Furthermore, trading on the platform would be offered to clients in eligible jurisdictions outside of the USA.
The launch of the Coinbase International Exchange received positive feedback from the crypto community and support for the firm’s global growth. Many consumers openly acknowledged the efforts of the exchange, and some of them even criticized US regulators for their controversial role. However, most people believe that Gary Gensler is either a fool or someone with an agenda.
Currently, it is widely believed that Coinbase’s efforts would do wonders for cryptocurrencies in the long run. The crypto community widely believes that the SEC has failed miserably in protecting investors and that its claims are baseless. Moreover, the regulatory body was also accused of its failure regarding the maintenance of fair and efficient markets.
