Coinbase Borrow was a U.S.-based exchange that allowed consumers to borrow up to $1 million in currency loans against up to 30% of their bitcoin holdings, with interest. Customers were notified via email on Wednesday that the last day to apply for new loans was May 10th, and the US Securities and Exchange Commission (SEC) is planning an enforcement action for potential securities incidents. The closing of Coinbase Borrow is not due to any enforcement action, and its spokeswoman assigned the decision to lower demand. The bank first opened its doors in November 2021, promoting itself as a way to obtain fiat loans without having to sell bitcoin, which could result in a taxable gain or loss
The U.S. Securities and Exchange Commission (SEC) removed what would have been the agency’s first official definition of “digital asset” from its most recent hedge fund rule. Although in 2022, the SEC incorporated the definition to modify mandatory disclosures for hedge funds. The government is still considering crypto issues, which have played a large role in enforcement actions and rule proposals. Last month, the regulator revived a previously proposed rule, redefining the phrase “exchange” and introducing decentralized finance (DeFi). Although the SEC has yet to define digital assets, it is a frequent topic in its speeches. Consumer advocacy organizations praised the SEC for including a separate category in the proposed regulation for hedge funds disclosing digital assets. The Securities Industry and Financial Markets Association has expressed concern that the concept encompasses non-security digital asset classes, however, Sifma has requested that the definition be revised.
