Coinbase will stop providing new loans through its Coinbase Borrow service, which offers eligible US customers cash loans using their crypto assets as collateral. The company sent an email to Borrow customers on May 3, 2023, stating that they will no longer be able to obtain new loans from May 10. The email did not provide a reason for the decision.
According to a Coinbase spokesperson, the company frequently reviews its products to prioritize the most essential services to its customers. They added that there would be no impact on customers’ current loans, and no action is required from them.
Coinbase users could borrow up to 40% of their Bitcoin holdings through the Borrow service, with a maximum limit of $1 million. However, using the service came with an annual percentage rate of around 9%, with no credit checks required.
In another development, Coinbase has announced plans to expand its services globally through the introduction of Coinbase International Exchange (CIE). This crypto derivatives platform caters to institutional investors and will enable approved foreign users to access Coinbase’s perpetual futures market for digital assets and other offerings.
Also, Coinbase is currently facing a class-action lawsuit in a California District Court for allegedly violating Illinois’s biometric privacy laws. The lawsuit, filed by a Coinbase user on May 1, 2023, claims that Coinbase’s requirement for customers to provide fingerprints and facial templates for KYC checks violates specific provisions of the Biometric Information Privacy Act (BIPA) in Illinois. The plaintiff argues that Coinbase had a duty to obtain users’ consent before collecting their biometric data under BIPA and disclose the purpose behind collecting the information, the duration for which it would be stored, the intended usage, and the method by which it would be permanently disposed of.
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