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If Coinbase liquidates a user's Bitcoin collateral under a loan agreement, it charges a flat fee of 2% of the total transaction value at the time of liquidation.
This analysis describes what Coinbase's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
This provision establishes a liquidation fee triggered by collateral sale events under Coinbase lending arrangements, creating a fixed cost that applies at the point when a borrower's collateral position is being reduced, potentially compounding financial exposure during adverse market conditions.
The updated fee schedule removes the pre-published 1% fee for instant unstaking and instead discloses the fee only at the moment a user requests to unstake. This means users can no longer review the exact cost before initiating a transaction through the published schedule. The revision also explicitly includes converting a pending standard unstake to an instant unstake as a fee-triggering action. No fee continues to apply if a user waits for the full unbonding period.
View change record →Under this provision, if a user's BTC collateral is sold by Coinbase or an affiliate to satisfy a loan obligation, a 2% flat fee on the total transaction is charged in addition to any other applicable costs. The terms state this authority is exercised as authorized under the applicable loan agreement.
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"If you borrow USD from Coinbase or an affiliate of Coinbase and we have to sell your BTC collateral (as authorized under an applicable loan agreement), we will charge a flat fee of 2% of the total transaction.Excerpt from Coinbase's Fee Schedule
REGULATORY LANDSCAPE: Coinbase's lending and collateral management services may be subject to CFPB supervision depending on product classification and loan volume. State lending and money transmission laws in California, New York, and other jurisdictions impose specific requirements on collateral liquidation practices, including notice requirements and fee limitations. The CFPB has authority over non-bank financial companies offering credit products to consumers. GOVERNANCE EXPOSURE: Medium. The 2% liquidation fee is a fixed, disclosed charge but its application in distressed market conditions may attract regulatory scrutiny regarding fairness and adequacy of notice prior to collateral sale. The cross-reference to 'an applicable loan agreement' means the full terms governing when liquidation is triggered are not fully contained in this fee schedule document. JURISDICTION FLAGS: State lending laws in California, New York, and Texas impose notice and cure period requirements before collateral liquidation that may constrain the exercise of this provision. The involvement of Coinbase affiliates in lending arrangements may expand the jurisdictional scope of applicable lending regulations. CONTRACT AND VENDOR IMPLICATIONS: Institutional borrowers using Coinbase lending products should ensure the applicable loan agreement clearly defines liquidation triggers and notice periods, and should assess whether the 2% fee is consistent with comparable secured lending fee structures in their agreements. COMPLIANCE CONSIDERATIONS: Legal teams reviewing this provision should cross-reference the applicable loan agreement to assess whether liquidation trigger conditions, notice requirements, and fee disclosure obligations satisfy applicable state and federal lending regulations. The reference to Coinbase affiliates as potential lenders should be evaluated for regulatory registration and disclosure obligations.
This provision establishes a liquidation fee triggered by collateral sale events under Coinbase lending arrangements, creating a fixed cost that applies at the point when a borrower's collateral position is being reduced, potentially compounding financial exposure during adverse market conditions.
Under this provision, if a user's BTC collateral is sold by Coinbase or an affiliate to satisfy a loan obligation, a 2% flat fee on the total transaction is charged in addition to any other applicable costs. The terms state this authority is exercised as authorized under the applicable loan agreement.
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