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BlockFi Lowers Interest Rates for Top Tier Crypto Deposit Accounts

Crypto lending company BlockFi has lowered the interest rates for their biggest cryptocurrency deposit accounts.

Crypto wealth management and lending company BlockFi has lowered the interest rates for their biggest cryptocurrency deposit accounts, according to an official blog post on March 22.

BlockFi launched the BlockFi Interest Accounts (BIA), cryptocurrency accounts supporting Ethereum (ETH) and Bitcoin (BTC), earlier in March. The accounts initially offered a 6.2 percent annual interest paid monthly in crypto. The company’s further analysis showed that almost 75 percent of the clients have a balance of less than 5 BTC or 150 ETH, while the median account balance is $7,000.

Per the recent announcement, balances of up to or including 25 BTC or 500 ETH will still earn the 6.2 percent annual percentage yield interest rate, while all balances over that limit will reportedly earn a 2 percent rate starting on April 1.

The company also announced that in April it will add a fiat withdrawal fee of 0.0025 BTC and 0.0015 ETH, although all withdrawals submitted prior to that will reportedly remain free. “These small adjustments are necessary to ensure that BIA can support as many clients as possible while maintaining the high quality services we provide to the average crypto consumer,” BlockFi explained.

Following its launch, BlockFi’s product faced a critical reaction from some industry players, specifically due to the company’s terms and conditions that allow it to determine the interest rate each month at its sole discretion, according to Bloomberg. David Silver, founder of the Silver Miller law firm, said:

“A superficial review of their splash page and their terms and conditions shows that their advertising is not necessarily what they’re guaranteeing […] and it’s understandable why people would be confused if they didn’t receive their 6.2 percent because BlockFi’s advertising makes it seem like that’s a guaranteed rate of return.”

Commenting on the critics, Zac Prince, chief executive of BlockFi, told Bloomberg:

“We didn’t launch with a 6 percent rate with the intention of changing it one month later and pulling a big gotcha on everybody. That would be really bad business.”

Last May, trading and clearing platform LedgerX launched a new BTC savings product that is licensed by the United States Commodities Future Trading Commission. Rather than just “hodling” and hoping that Bitcoin appreciates, investors can purportedly earn a fiat-based yield on their BTC by employing what is referred to as a call overwrite technique, wherein an investor deposits BTC into LedgerX, then sells a call option at a slightly longer date, with a higher strike call option.

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Startup Finturi Raises $2.2 Million for Its Blockchain-Based Invoice Finance Platform

Startup Finturi has secured $2.2 million to let businesses secure loans against invoices with blockchain and AI.

Dutch blockchain startup Finturi has secured 2 million euro ($2.2 million) to enable businesses to secure loans against invoices via blockchain tech, the company tweeted on March 12.

Founded in September 2018, Finturi aims to help businesses finance invoices by linking them with financiers to borrow money against invoices, using blockchain and artificial intelligence (AI), according to a report by startup-focused publication on March 11.

Finturi has reportedly raised its first investment via an angel round led by NetSam Participaties BV, which evidently participated in an investment round for the first time, according to Crunchbase.

Finturi’s blockchain-based invoice finance platform is scheduled to launch in the third quarter of 2019. According to the report, the Finturi team plans to provide a completely peer-to-peer (P2P) platform in future that includes businesses’ clients.

Expressing concerns about many new businesses face difficulties with raising capital, Finturi CEO Johannes Brouwer stated that the firm aims to enable businesses to get loans against invoices within 24 hours. According to Finturi’s CEO, the upcoming platform will provide financiers with a “platform for investing in invoices with minimum hussle.”

The lead investor from NetSam Participaties BV said that blockchain tech combined with AI has a massive potential in eliminating inefficiencies in existing financial processes by cutting costs, accelerating processing time and providing  better security.

Recently, five Japanese banks entered into a partnership to launch blockchain-based financial services infrastructure. Targeting a range of financial operations for efficiency improvements, the banks will leverage IBM’s expertise during the development phase.

Last week, economist and notorious crypto critic Nouriel Roubini argued that blockchain has nothing to do with the future of financial services. Roubini excluded the term from the list of major technologies that he sees as leading to a manufacturing or fintech revolution, including AI, machine learning, big data and the Internet of Things.

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Crypto Lending Company BlockFi Launches Crypto Accounts With Bitcoin, Ethereum Support

BlockFi has launched new cryptocurrency accounts bearing 6 percent annual interest paid monthly in crypto.

Crypto wealth management and lending company BlockFi has launched new cryptocurrency accounts supporting Ethereum (ETH) and Bitcoin (BTC) bearing 6 percent annual interest paid monthly in crypto. The company announced the launch through a post published on its website on March 4.

In July last year, crypto-focused merchant bank Galaxy Digital led a $52.5 million fundraising round for BlockFi.

Furthermore, according to the March announcement, interest earned in BlockFi’s interest accounts compounds monthly resulting in an annual percentage yield of 6.2 percent. The accounts also reportedly are not entirely new, since they have been in private beta since the beginning of the current year and already hold over $10 million in assets.

The post also specifies that client assets are custodied at the Gemini Trust Company (the custodian of the crypto exchange lead by the Winklevoss Twins, Gemini), which is regulated by the New York State Department of Financial Services. The post also notes that clients are reportedly able to withdraw funds from such accounts at any time.

The yield, which is being distributed through such accounts, will be generated from institutional borrowers. The company also claims:

“BlockFi’s proprietary risk management system, which automatically initiates margin calls and liquidations to protect our customers’ assets, has a perfect zero-loss performance record since launching in 2017.”

As Cointelegraph has reported, cryptocurrency lending company Genesis Global Trading reportedly processed $1.114 billion in borrows and lends last year.

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Instant Crypto Credit Line Provider Says It Processed $300 Million in Seven Months

A crypto lender that offers consumers an instant credit line says it has processed more than $300 million in seven months, making a net profit of $3 million.

A crypto lender offering instant loans in more than 45 fiat currencies says it has amassed more than 170,000 users — with $300 million processed over a seven-month period.

Nexo enables consumers to deposit their crypto assets into a secure wallet and instantly access a flexible credit line via automated approval and without the need for credit checks. They can then spend this credit by card or withdraw it to a bank account with a same-day or next-day transfer without incurring hidden fees or foreign exchange commissions.

The platform says its interest rates, which are deducted directly from a user’s available credit limit, start at an 8 percent annual percentage rate (APR) — with the company arguing that this is “much lower than the average credit card rate.” Repayments on loans are flexible and have no minimum requirements, and they can be completed at any time without subjecting additional costs.

Nexo has been featured on CV VC’s list of the 50 most important Swiss blockchain companies, and it says it is the only crypto lender that makes loans available to more than 200 jurisdictions around the world.

Substantial growth

According to Nexo, the “ravaging bear market” in the crypto world has not affected its performance, with the company earning a net profit of $3 million within the first seven months of its operation. As reported by Cointelegraph at the start of the year, lenders have enjoyed buoyant demand because borrowers have been reluctant to sell their assets when prices are depressed.

Back in December, the company paid a dividend of $912,071 to holders of its native NEXO token, representing 30 percent of the profits made. Nexo claims that the 4.80 percent annualized yield is higher than all of the dividend-bearing stocks in Warren Buffett’s portfolio — including big names such as Apple, JPMorgan Chase and Goldman Sachs. This comes despite Buffett’s ongoing skepticism about cryptocurrencies in general, with the billionaire investor recently describing Bitcoin as a “delusion” that has no unique value at all.

To underline why these financial results are important — with its business turning a profit, let alone being operational – Nexo cites research from Ernst & Young, which suggests that only 13 percent of the companies that conducted initial coin offerings in 2017 actually have a working product, with 71 percent have no offering on the market at all.  The firm adds: “Typically, within one year of a traditional venture-backed software startup, you would expect to see a significantly higher percentage of the companies with a functional early stage product.”

Insured and secure

According to Nexo, all of the crypto assets that it holds for users are insured against third-party hacks, copying, theft of private keys, insider theft or dishonest acts of employees. This custody insurance coverage compensates clients for losses of up to $100 million in the event of a security breach. Nexo has taken out an enterprise-solution policy offered by BitGo (backed by Goldman Sachs) and provided by Lloyd’s.

The company also says that it is a founding member of the Collateral Protection Insurance consortium, which ensures that borrowers are fully compensated if the assets they provide are destroyed, stolen or rendered unavailable.

Nexo has been backed by Michael Arrington, the founder of TechCrunch, with Arrington XRP Capital investing “substantial amounts” into the project. The company says that its website has now received more than 1 billion impressions — attracting 35,000 members in its Telegram community, along with more than 31,000 followers on Twitter. The crypto lender has also been featured by renowned business publications and news services, including Forbes, Bloomberg and Reuters.

Learn more about Nexo

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Report: Blockchain Home Equity Loan Platform Raises $65 Million

Fintech startup Figure, which was founded by SoFi founder Mike Cagney, has reportedly raised $65 million from major venture capital funds.

A blockchain-based home equity loan platform, Figure, has raised $65 million from various major financial and venture capital firms, tech news site TechCrunch reports on Feb. 27.

The firm, which was founded by SoFi founder and former CEO Mike Cagney, reportedly raised the funds from such majors as Morgan Creek, DST Global, DCM, Ribbit Capital and Nimble Ventures. The recent investment bumps the total funds raised by the firm up to $120 million, according to TechCrunch.

Cagney’s new firm, which reportedly has issued over 1,500 equity lines, is purportedly targeting older clients who are “cash light and rich in equity” or “CLAREs.” The company is currently lending $1.5 million per day, a figure which Cagney expects to double every few months, reports American Banker.

The founder told American Banker, “At the end of 2019, Figure should look like a robust financial platform that can meet the needs of our customers.” Cagney also added that Figure is moving into other areas like wealth management, checking accounts, and unsecured consumer loans.

Cagney’s former company SoFi is partnering with major United States-based crypto exchange Coinbase to roll out crypto trading support. The partnership with Coinbase will purportedly allow SoFi to launch crypto services by the second quarter of this year. CEO Anthony Noto said in an interview:

“Our target audience wants to see what the price of cryptocurrency is, and to buy it. They have a desire to do that and in many cases they already are.”

Noto assumed the role of SoFi CEO after Cagney stepped down amid sexual harassment allegations in 2017. Cagney told American Banker:

“One of the biggest takeaways is that at SoFi, we grew so fast and we never really understood what we were going to grow into, and culture never took a front seat. [At Figure] we have a very clear adherence to a ‘no-asshole’ policy.”

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Major Spanish Bank BBVA Closes €150 Mln Loan With Porsche Holding Using Blockchain

Spain’s second largest bank, Banco Bilbao Vizcaya Argentaria, has closed a €150 million loan using blockchain technology.

Spain’s second largest bank, Banco Bilbao Vizcaya Argentaria (BBVA), has closed a €150 million loan using blockchain technology with Porsche Holding, the largest car distributor in Europe. The news was reported by financial news site Finextra Dec. 14.

The transaction is reportedly BBVA’s first blockchain-based loans deal with a non-Spanish borrower. The bank has to date arranged several blockchain-based loans with Spanish corporate customers, including a syndicated loan of $150 million for partly state-owned Spanish national electrical grid operator Red Eléctrica de España (REE) in November, and a €100 million long-term bilateral corporate loan with Spanish engineering firm ACS.

Finextra reports that the Porsche Holdings deal uses the “same mix of private and public blockchain technology” BBVA used in its prior blockchain loan transactions.

As reported, the REE loan had been conducted on a private Hyperledger-based network with participation from three funding banks (BBVA, BNP Paribas and MUFG), REE and two legal advisory firms; the unique document identifier for the signed contract was recorded on the Ethereum (ETH) public blockchain.

In reference to the Porsche Holdings loan, Frank Hoefnagels, head of BBVA CIB in Germany, emphasized that for acquisition finance transactions, for which speed is of the essence, blockchain is of particular relevance:

“This transaction is all about putting blockchain technology into meaningful practice in the interactions with our clients. Our aim is to improve clients’ experience by simplifying processes and enhancing the speed of execution”.

In April, BBVA claimed to have become the “first” global bank to conduct an entire loan process using blockchain, again in a part-private part-public configuration. Recognition of blockchain’s efficacy for lending continues to widen: this October, United Kingdom-based bank Natwest announced it would be integrating a new blockchain platform based on R3 Corda technology for use in the syndicated loans market.

For its part, Porsche’s manufacturing arm began testing blockchain apps for its vehicles this February, claiming to be “the first automobile manufacturer to implement and successfully test blockchain in a car.”

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Ripio Rolls Out Crypto-Powered Loans Across Latin America

Here’s something you don’t see every day: an ICO that has actually led to a shipped, working financial product.

Revealed exclusively to CoinDesk, Argentinian startup Ripio is making peer-to-peer microloans available today to all its 200,000 bitcoin wallet users in Argentina, Mexico, and Brazil. The Buenos Aires-based company raised $37 million in an initial coin offering (ICO) last year to build the Ripio Credit Network, which matches individual lenders and borrowers across the globe through ethereum smart contracts.

Today’s full rollout of that marketplace follows a closed beta in which more than 800 loans were facilitated to customers in Argentina. Ripio said it now has 3,000 lenders on the network, many of them located in Asia, issuing loans for up to $730, though so far the average loan size is $146.

Ripio CEO Sebastian Serrano told CoinDesk:

We have people from Asia funding people in South America, which is something you cannot do with another [app].”

Previously known as Bitpagos, Ripio is one of the longest-running startups in the crypto space, with well-established merchant processing, exchange and wallet services. It entered the credit business in 2016, lending its own funds to consumers in Argentina, before pursuing this more ambitious vision for global p2p lending.

While the borrowers receive their loans in fiat, the new network is powered by an ethereum-based token called RCN. Lenders send the funds in RCN, a cut of the tokens goes to third parties involved in the lending process – such as identity verifiers, credit scorers and co-signers of the loans – and Ripio (and, potentially, other wallet providers) converts the RCN to fiat before disbursing the money to the borrower.

Unlike most exchanges and mobile lending services, Ripio’s offerings are available to unbanked crypto users. This is essential for Latin American markets where people have diverse but overwhelmingly complicated histories with the banking industry. For example, according to World Bank statistics from 2017, around 30 percent of adults in Brazil are unbanked, compared to 54 percent in Colombia.

Although the startup doesn’t have data on how many unbanked users are on its platform, a survey of 1,000 Ripio users revealed 19 percent didn’t have a credit card. They often fund their wallets by depositing cash at convenience stores that partner with Ripio.

With the credit network, however, they now have a way to build a track record of repaying debts, which could help them obtain financial services in the future. Further, “the entire lifecycle of the credit and the loan” is contained in the smart contract on the blockchain, Serrano said.

“It gives the user credit history. Even if the marketplace disappears the code will continue to execute,” he said.

To make credit histories recorded in smart contracts widely useful, Ripio has proposed a standardized way to present claims about an identity (e.g. “Joe made all his car loan payments on time”) on ethereum. Serrano explained:

“In order for it to work across products and networks, ethereum needs to get a standard for identity claims so that every project uses one or two claim standards, kind of like we have ERC-20 [for tokens].”

Cross-border markets

Over the next year, Ripio plans to expand services to Chile, Colombia, and Uruguay.

“Every market has these different characteristics, regulations, things you have to comply with,” Serrano told CoinDesk, “Things you have to do to make it easy for users to deposit cash.”

Political instability can create roadblocks, however. For example, Ripio once operated in Venezuela and still maintains staff there, but security concerns and opaque regulations forced the startup to halt operations.

“We hope to extend service there as soon as this madness ends,” Serrano said. “It’s become very, very difficult to maintain operations in Venezuela, legally.”

In order to expand, Ripio is looking for more fiat-centric partnerships like the ones it established in Brazil with Neon Bank and Banrisul. Since users are handing over cash, Ripio needs banks for storage. Plus, expanding such partnerships in each nation could provide crucial liquidity.

Santiago Siri, the Argentinian founder of a blockchain governance project called Democracy Earth, told CoinDesk that Ripio’s partnerships are already making an impact across the continent.

For example, through its partnership with the e-commerce giant Mercado Libre, shoppers and sellers can transfer funds between their e-commerce accounts and Ripio wallets, offering new avenues for people to earn or spend crypto.

“Large populations in countries like Brazil and Mexico are unbanked,” Siri said. “So companies like Mercado Libre have to find ways to do business without credit cards. Ripio has been leading this, allowing people to do payments [indirectly] with bitcoin.”

Serrano said 15 percent of Ripio wallets’ transaction volume, millions of dollars per month, now comes from Mercado Libre. Rosine Kadamani, the founder of the educational Blockchain Academy in Brazil, praised this partnership with the largest e-commerce platform in the region, as well as Ripio’s crypto-powered loans, saying:

“When we’re trying to get people in the crypto space, it’s a good strategy to reach people where they are already comfortable… Why not provide a space for peer-to-peer loans? I see no reason at all for credit to be monopolized by banks.”

Speaking to the demand for such cross-border conduits, Siri added: “Latin America is a very fertile region for the deployment of cryptocurrency infrastructures.”

Sebastian Serrano image courtesy of Ripio

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