The popular cryptocurrency data and wallet provider Blockchain.com is working on loaning more than $120 million in November.
As an article published on Nov. 14 outlines, the United Kingdom-based firm is secretly building a loan desk that will compete with companies like BlockFi and Genesis Global Trading.
Peter Smith, Blockchain.com CEO, commented that their loan business begun with loans that were given out to other cryptocurrency lending firms and initially started on a “case-by-case basis”.
While In August Blockchain.com gave out approximately $10 million in new loans, it is expected that this sum will jump to $120 million by the end of November.
Is a crypto loan crash coming our way?
In October, a report with data from former Wall Street traders noted that crypto credit organizations are adding excessive amounts of credit for very small periods of time and are creating a risk for a massive blow-up.
Nevertheless, Smith was not too concerned with this potential risk. While implying about the breakdown of financial services company Lehman Brothers Holdings during the crisis in 2008, he shared that Blockchain.com’s “loan desk is so heavily collateralized a Lehman moment would be impossible”.
It looks like Blockchain.com does not feel that big of a risk when compared to other lending companies as every loan arrangement of theirs is catered to the concrete client.
BlockFi CEO, Zac Prince, shared the same opinion that such an eruption is not likely to happen soon. He also shared that BlockFi has “stringent standards and has never experienced a late payment or loss”.
On the opposite side, CoinList’s Matthieu Jobbe Duval commented that “crypto is still a small market relative to traditional asset classes, however, the feeling of deja-vu is there: lack of regulation, cheap credit available with minimal due-diligence, and broad optimism”. These are all the required elements for an eventual blow-up.
A strange occurrence
During the course of October, something peculiar happened in Blockchain.com as a number of employees left the company. It is said that some of the longest-serving senior executives are very likely to leave as well.
Trusted sources shared that these people are the executive vice president of finance, Chris Lavery, and COO Liana Douillet Guzmán. The source also mentioned there is a good flow of employees quitting the firm.