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On Tuesday, Coinbase announced it created a new digital asset lending platform in the US aimed at large institutional investors.
On Tuesday, Reuters reported that Coinbase is launching a new crypto lending service in the US for institutional clients. According to its regulatory filing, Coinbase has raised $57 million for its new digital asset lending platform.
Coinbase Fills the Void Created By Genesis and BlockFi
The exchange’s new venture was revealed quietly in a US Securities and Exchange Commission (SEC) filing, showing the exchange had already raised an astronomical amount of capital for its platform.
Coinbase’s new lending service will undoubtedly fill the large market gap created by Genesis and BlockFi. Genesis announced its crypto lending unit filed for bankruptcy in January after revealing it owed its creditors over $3.5 billion.
Shortly before Genesis announced its lending unit was in trouble, crypto lender BlockFi filed for Chapter 11 bankruptcy. The lender filed for bankruptcy protection in the US just days after suspending withdrawals amid the fallout from the FTX exchange.
The new service allows clients to lend money to Coinbase and receive collateral exceeding the loan’s value. According to a person familiar with the matter, Coinbase can then use these funds to make secured loans to institutional trading clients.
A Coinbase spokesperson said in a statement:
“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.”
Base Suffers An Outage
Amid the bullish news of Coinbase’s new crypto lending service, its newly launched Layer-2 Ethereum network “Base” experienced an outage lasting 30 minutes and taking an additional half an hour to resolve. The network assured customers that no funds were at risk.
“Earlier today, we had a delay in block production due in part to our internal infrastructure requiring a refresh. The issue has been identified and remediated. No funds are at risk.”
Base’s development team reported that “users may have issues submitting transactions” at 05:36 ET on Tuesday.
Coinbase announced Base’s launch in February and said the platform is designed to be a low-cost, secure, developer-friendly environment that will attract more users to the digital asset space.
The exchange opened its Layer-2 network to the general public on August 9 after releasing its Ethereum bridge and opening the platform for builders on July 13.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.