Summary

• Coinbase has launched a new crypto lending service that caters to institutional clients..
• The service is similar to the prime brokerage services offered by traditional banks and Coinbase has raised $57 million for this initiative.
• The service differs from Coinbase's previous controversial Lend program, which was discontinued in 2021.

Coinbase has unveiled a new crypto lending service tailored exclusively for institutional clients, aiming to address the void left by the recent troubles faced by firms such as Genesis and BlockFi. According to a SEC filing made on September 1, Coinbase has successfully raised $57 million to support the initiative.

This service enables Coinbase to extend secured loans to institutional trading clients, mirroring the prime brokerage services offered by traditional banks. This development comes after Genesis and BlockFi encountered substantial losses last year, leading to either complete or partial bankruptcy filings.

Notably, this new offering differs from Coinbase's previous controversial Lend program, which was discontinued in 2021 due to regulatory concerns from SEC officials. This new lending service primarily caters to institutions, resulting in comparatively less regulatory complexity, given the presumption that larger investors possess the necessary sophistication to navigate the crypto landscape.

A Coinbase spokesperson expressed:

"With this service, institutions can choose to lend digital assets to Coinbase under standardized terms in a product that qualifies for a Regulation D exemption. Coinbase is working to update the financial system that was built over 100 years ago, leveraging crypto to provide people with more economic freedom and opportunity. To advance this purpose, Coinbase is building the most trusted crypto products and services, and supporting other builders to bring 1 billion people into crypto."

Coinbase's innovative crypto lending service marks a significant step forward in the evolution of the cryptocurrency industry, particularly in catering to the unique needs of institutional investors.