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Cryptocurrency exchange Coinbase is halting new lending through its Borrow service, a product that allows some U.S. customers to post cryptocurrencies as collateral for a cash loan.
In an email sent to Coinbase Borrow customers on May 3, which the recipients shared on Twitter, the exchange said – without giving reasons – that customers will not be able to borrow new loans from Coinbase Borrow from May 10.
He added that outstanding loans would not be affected and no further action was required for customers.
Coinbase has not publicly explained why it closed Borrow. A Coinbase spokesperson told Cointelegraph:
“We regularly evaluate our products to make sure we prioritize the offerings that interest our customers the most.”
The service allows users to borrow up to 40% of their assets in bitcoin (BTC) on the exchange, with a limit of $1 million. It does not require a credit check and users pay almost 9% per annum for the service.
The announcement comes amid a regulatory spat between Coinbase and the Securities and Exchange Commission (SEC), which sent the exchange a Wells notice in March that the exchange said dealt with “possible violations of securities laws.”
Related: Coinbase officers and board members sued over alleged insider trading during listing
The email also informs users of the Q1 results announcement, which is expected on May 4th.
Citi investment analysts downgraded Coinbase’s stock from Buy to Neutral ahead of the exchange’s first-quarter earnings report. Analysts at Mizuho also reportedly maintained their “Unsatisfactory” rating on Coinbase, saying its “fundamentals remain weak” citing lower average daily trading volumes.
Earlier this week, amid a seeming crackdown on crypto firms in the US, Coinbase decided to take its exchange global with the launch of derivatives trading platform Coinbase International Exchange (CIE) on May 2.