Pressure is mounting on US digital asset exchange giant Coinbase as regulators intensify their fight against bitcoin and cryptocurrency.
The US cryptocurrency exchange will stop issuing bitcoin-backed loans through its borrowing service Coinbase starting May 10.
In a statement released on May 3, the company confirmed that the service, which allows users to borrow against Bitcoin, will no longer be available.
“We regularly evaluate our products to ensure that we prioritize the offerings our customers care about the most,” she said.
Coinbase Borrow is offering loans of up to $1 million against BTC collateral but only in certain US states, according to Bloomberg.
According to its website, Coinbase customers can borrow up to 40% of the value of Bitcoin in their accounts. Moreover, the annual interest rate on loans is 8.7%.
Coinbase app download refused
The company has not It is clear Whether the termination of loan service is due to regulatory pressure. However, Coinbase has been on fire recently following Wells’ notice issued by the SEC in March.
According to Apptopia, a research firm that tracks app usage metrics, the number of people downloading the Coinbase app continues to decline.
The data paints a bearish picture for the company, according to Apptopia’s vice president of research, Tom Grant.
Moreover, app usage dropped significantly in March as both casual and power users spent less time using the app, according to reports.
Coinbase was in hot water again this week when executives were accused of insider trading and dumping millions into stocks to avoid losses before the earnings report was released.
In addition, central exchange (CEX) volumes fell nearly 50% in April, according to Kaiko. April was the lowest so far this year in terms of CEX volumes, with March the highest.
Coin prices drop
On May 4, the company is scheduled to release its quarterly earnings report. Analysts expect Coinbase to report a first-quarter net loss of $329 million, or $1.38 per share.
Moreover, its share price has taken a beating over the past two weeks.
Since mid-April, COIN prices have fallen by 30%, and have continued to fall this week. The stock fell 5.5% on May 3 to end at $48.88 in after-hours trading, according to market surveillance.
The stock is currently down more than 40% from its 2023 high of $84 on March 21 as regulatory pressures intensified. In comparison, cryptocurrency markets are down just 7.5% from their 2023 highs.
All information on our website is published in good faith and for general information purposes only. Any action taken by the reader regarding the information on our site is at his own risk.