As stated by Coinbase, “Customers are unable to take out new lines of credit against their crypto and existing Coinbase Borrow customers will have until November 20, 2023 to pay back their existing loans.”
Weeks after ceasing the issuance of new Bitcoin (BTC) backed loans, crypto exchange Coinbase announced its plans to gradually shutter its Borrow product.
In its blog post, Coinbase asked users with outstanding loans to repay their borrowed sum by November 20, 2023. Coinbase noted that should users fail to close their positions by November 20, the exchange will liquidate their BTC collateral to pay off the due amount. The firm clarified that winding down Coinbase Borrow will not impact Coinbase Prime clients.
Coinbase has also waived the 2% liquidation fees and will not charge any penalties if clients repay their loans before the end-of-term. Moreover, Coinbase has offered four months of free Coinbase One membership to affected users.
Launched in late 2021, Coinbase Borrow allowed users to finance fiat loans using their Bitcoin holdings at low interest rates of 8.7% APR.
In the beginning of May, Coinbase said the exchange will stop issuing new loans via Coinbase Borrow. A spokesperson for the platform commented that the ongoing dispute between the SEC and Coinbase did not influence their decision to suspend Coinbase Borrow. Coinbase’s blog post also did not mention the SEC’s lawsuit, and instead said,
“We regularly evaluate our products to ensure we’re prioritizing the offerings that our customers care about most. After much consideration, we have made the decision to wind down Coinbase Borrow.“
Written by
Ayush Pande
Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.
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