Coinbase Borrow’s days are numbered.
Customers of the U.S.-based exchange who used the program – which allowed customers to borrow fiat loans up to $1 million against as much as 30% of their bitcoin holdings, with interest – received an email on Wednesday informing them that the last day to take out new loans would be May 10.
Coinbase has been under extra scrutiny from regulators following crypto exchange FTX’s collapse and is expecting an enforcement action from the U.S. Securities and Exchange Commission (SEC) over alleged securities violations.
However, the closure of Coinbase Borrow seems – at least for now – to be unconnected to any enforcement action. A person familiar with the matter told CoinDesk the closure of Coinbase Borrow had nothing to do with either pending or past troubles with the SEC.
When contacted by CoinDesk, a spokesperson for the exchange attributed the decision to reduced demand.
“We regularly evaluate our products to ensure we’re prioritizing the offerings that our customers care about most,” the spokesperson said. “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 Borrow initially launched in November 2021, and was advertised as a way to get fiat loans quickly without needing to sell bitcoin, which could incur a taxable gain or loss.