Wallet and cryptocurrency data provider Blockchain.com is said to be gearing up to give out more than $120 million in loans. Reports say the UK-based firm has been developing its loan desk quietly with the aim of competing against companies like BlockFi and Genesis Global Trading.
Peter Smith on the Topic
According to Blockchain.com CEO Peter Smith, the lending side of his business got its start by providing loans to other crypto lending companies. These deals were done on a “case-by-case basis.” The company has reportedly lent about $10 million in loans in August, but they anticipate lending around $120 million by November’s end.
Smith said Blockchain.com is unique because it doesn’t have a size limit. It’s the reason why other lending companies turn to them. He also claims that the company is now one of the top cryptocurrency lenders.
There have been concerns raised about the crypto lending business. Several ex-Wall Street traders believe that the digital asset lending firms are adding a lot of credit fast and warned this could lead to a messy blow-up.
Smith doesn’t appear to be worried about a supposed blow-up. The businessman recently told The Block that Blockchain.com’s loan desk is extensive collaterized it’s impossible for it to experience a “Lehman moment.” The latter was an allusion to the 2008 collapse of the Lehman Brothers Holdings’ empire.
The crypto provider reportedly believes the risk it faces is minimal to what other lending firms will have in front of them. The company claims they’re secured because each loan transaction is personalized to the individual client.
Zac Prince on the same Topic
Zac Prince, the CEO of BlockFi and one of Blockchain.com’s rivals, agrees that a blow-up won’t be happening soon. He explained in a recent Bloomberg article that BlockFi has strict standards and has never experienced a loss or late payment to date.
One expert tried to explain the wariness regarding a blow-up by the traders. He said that the cryptocurrency market is still a small one when compared to the traditional asset classes. He also noted that the broad optimism, lack of regulation, and the cheap credit that’s offered with basic due diligence are all providing the ingredients for a potential blow-up.
Blockchain.com might be in the spotlight again because of its lending desk, but it’s hardly the first time the company has faced controversy. Last month, it faced scrutiny when it experienced several high-profile exits. Insiders also report that more executives are set to leave the company, the most notable are Finance Executive Vice President Chris Lavery and COO Liana Douillet Guzman.