Coinbase Stops Coinbase Borrow, Users Need To Repay Loans Before November 20

Key Points:

• Coinbase announced it will shut down its Coinbase Borrow product in the next few months.
• The platform says users need to repay all their loans by November 20.
• The service outage is explained simply by a drop in demand.

According to CoinDesk, a Coinbase spokesperson said that Coinbase will gradually shut down its Coinbase Borrow lending operation over the next few months in order to focus resources on the products that customers are most interested in.

“We have notified prioritizing loan holders and are taking extra measures to ensure a smooth transition for them, including providing a four-month loan repayment period and access to customer support through Coinbase One,” According to a statement sent to CoinDesk. Coinbase One is a monthly subscription product with multiple benefits for traders.

Coinbase Borrow customers with outstanding balances have until November 20, 2023, to repay their loans. Coinbase Borrow is a product that allows customers to borrow loans equivalent to 30% of their Bitcoin holdings, with a cap of $1 million.

Coinbase introduced the Borrow program in August 2020 and launched it to the masses in November 2021. The program enables users in several US states to borrow up to $1 million using their Bitcoin as collateral with an APR of 8.7%. The product helps customers avoid selling Bitcoin when they need cash for an emergency.

As previously reported, Coinbase announced in May that it would no longer allow Coinbase Borrow customers to apply for new loans as part of its regular product re-evaluation process.

A Coinbase spokesperson said at the time that the closure of Coinbase Borrow was simply due to a drop in demand.

The decision to close the Borrow program comes amid an escalating legal dispute between Coinbase and the Securities and Exchange Commission. The legal battle between the two sides broke out in early June after the SEC filed a lawsuit accusing Coinbase of violating US securities regulations regarding the trading and staking activities of the following cryptocurrencies, which were all declared securities by the SEC: SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGEXODASH, and NEAR.

In November 2021, Coinbase had to shelve a lending product called Lend after a similar warning from the SEC. This product offers a crypto savings account with 4% APY higher returns than most traditional banks.

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