Coinbase Bows Out of Borrow Program

Coinbase end its borrow program amidst SEC concerns, but outstanding loans remain unaffected for customers

article-image

Nadezda Murmakova/Shutterstock, modified by Blockworks

share

Cryptocurrency exchange Coinbase will soon stop allowing users to borrow cash using bitcoin as collateral. 

The US-based exchange’s Borrow program allowed customers to borrow fiat loans up to $1 million against as much as 40% of their bitcoin holdings with an annual interest rate of 8.7% interest, in certain US states. 

But on May 3, the exchange told customers in an e-mail that starting May 10, they would no longer be able to access the Borrow feature.

“There is no impact on your outstanding loans and there is no action required at this time. You will continue to have access to your loan history and the full Borrow dashboard,” the company said, according to a screenshot of the email posted to Twitter. 

The exact number of eligible users who utilized the Borrow program isn’t clear. Blockworks reached out to Coinbase for comment. 

The move comes after the Securities and Exchange Commission warned Coinbase that it is at risk of an enforcement action for allegedly offering and selling unregistered securities — a big no-no in the eyes of federal law — although the definition of a security when it comes to digital assets is an ongoing debate in Washington policy circles.

And it’s not just one or two of Coinbase’s services that are in trouble. The SEC is eyeing the exchange’s spot market, staking service, Coinbase Prime and Coinbase Wallet. 

Analysts have weighed in on the stock’s potential for growth, and opinions on its prospects are divided. 

Earlier this week, Citigroup analyst Peter Christiansen slashed his price target for Coinbase shares from $80 to $65 and downgraded the stock from “buy” to “hold.” But Morningstar analyst Michael Miller took a more optimistic view, arguing Coinbase is undervalued and that his fair value estimate for its shares stands at $80.

Coinbase has not indicated that the closure of Coinbase Borrow has anything to do with the potential enforcement action.

Separately this week, the exchange launched an international derivatives exchange for institutional players outside the US. The new exchange is listing bitcoin and ether perpetual futures this week, and settling all trades in USDC without the need for any fiat on-ramps.

Coinbase will report earnings results on May 4 after the market close. The exchange’s shares last traded around $48 in Wednesday’s pre-market, and are up 32.8% in the year-to-date period, TradingView data showed.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (3).png

Research

Pear Protocol has proven its market fit through its pair-trading infrastructure, sustaining consistent trading activity despite recent headwinds. Its strategic pivot toward Hyperliquid integration represents a major growth catalyst amid industry consolidation. While short-term token unlocks present challenges, current valuations and liquidity conditions may offer compelling opportunities for investors.

article-image

Paradigm’s Alexander Grieve and Jito Labs CLO Rebecca Rettig broke down the GENIUS bill on the Empire podcast

article-image

The new system is “basically decentralizing ourselves,” Jito Labs CEO Lucas Bruder said

article-image

Markets are all-in on optimism — is that a forecast or a delusion?

article-image

The all-cash deal will push Sanctum beyond liquid staking tokens

article-image

The stablecoin-focused bill is set to have a profound effect on dollar dominance and the demand for US debt, a senior Treasury official says

article-image

PUMP’s numbers on Solana indicate a “fork in the road” when it comes to the role of DEXs in token sales, says Blockworks Research