Coinbase users will no longer be able to borrow fiat against Bitcoin

Coinbase will discontinue its Coinbase Borrow feature from May 10, according to a notice shared on Twitter and sent to users. The notice did not provide any explanation for the shutdown of the feature. However, it added that the move would not affect users' current loans. Users would continue to have access to their loan history and the Borrow dashboard.

Coinbase Borrow allowed users to borrow fiat currency against their Bitcoin holdings. The feature enabled users to borrow up to $1 million by posting up to 40% of their assets as collateral, without requiring any credit checks. The annual interest rate for the loans was approximately 9%.

Coinbase has made an announcement to scrap Coinbase Borrow, a service that allows users to borrow fiat against their Bitcoin holdings, without providing a reason for the decision. The move comes amid Coinbase's regulatory dispute with the SEC, which sent the company a Wells notice in March for possible securities law violations. To push the SEC for industry guidance, Coinbase filed a legal action in federal court last week, challenging the SEC to respond to its 2022 petition.

In addition to regulatory woes, Coinbase is facing multiple lawsuits. A lawsuit filed by a shareholder earlier this week alleges that Coinbase's top executives and board members profited by selling their stocks using inside information of impending bad news. Coinbase is also being sued for violating Illinois' biometric privacy law, with claims that it collected users' biometric scans without their consent and without disclosing how the data is handled.

It is noteworthy that Coinbase and other crypto exchanges based in the U.S. are exploring expansion opportunities beyond the country's borders in light of regulatory ambiguity. Recently, Coinbase unveiled the launch of its global exchange, catering to institutional investors.

On the other hand, Gemini has also introduced an offshore derivatives trading platform. It is expected that several other crypto enterprises will seek out more accommodating jurisdictions for their expansion plans.

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