Cryptocurrency trading platform CEX.IO has received a money lender license from the Gibraltar Financial Services Commission, allowing customers to instantly borrow funds against their cryptocurrency holdings without credit checks.
The new CEX.IO LOAN service will allow users to borrow any amount between $500 (£365) and $500,000 with flexible durations ranging from seven days to a year.
An interest rate of between 8.4 per cent and 14 per cent will be charged to all borrowers.
CEX.IO will offer a 50 per cent loan-to-value ratio on Bitcoin and Ethereum assets. Registered and verified customers can borrow funds instantly via the lending service, while new customers will have to open an account and complete the platform’s Know Your Customer checks before requesting a loan.
After a successful request, the customer’s collateral is placed in a secure cold storage. At the same time, CEX.IO credits the loan to the borrower’s user account in either US dollars or in euros.
The customer can then withdraw it to a card or bank account or use the sum to trade digital assets on the platform.
Upon the full repayment of the loan’s principal and interest, CEX.IO will release the cryptocurrency collateral back to the borrower.
“Our new service makes cryptocurrency-backed loans accessible for participants of the digital asset market who require extra capital,” said Anton Chashchin, commercial director for the CEX.IO LOAN service.
“With the new money lending license, CEX.IO LOAN can accomplish this goal, and we are delighted that Gibraltar’s regulators and Government have shown their support for our LOAN service.
“Through innovation and an expanding ecosystem of licensed products, we are committed to creating value on the cryptocurrency market.”