Aiming to improve the credibility of the cryptocurrency market
Credora, a US company that provides loans and credit ratings to the crypto asset (virtual currency) market, announced on the 25th that it raised approximately 800 million yen (6 million yen) in a strategic funding round led by S&P Global and the VC of the cryptocurrency exchange Coinbase. announced that it had raised $
— Credora Platform (@CredoraPlatform) April 25, 2023
The funds raised will be used to build credit services for institutional investors and to enhance computational technology to support borrower payment guarantees and monitoring.
Credora noted that in 2022, cryptocurrency companies went bankrupt one after another, and pointed out that lack of credit information was also a factor. He said:
Information asymmetries are one of the root causes of recent credit crises such as those at Three Arrows Capital and Alameda Research.
Borrowers were reluctant to share their confidential information, which forced lenders to rely on reputation and relationships when granting credit.
Additionally, another major problem plaguing the cryptocurrency credit market is the failure of centralized lenders. Billions of dollars of customer capital have been lost to opaque lending models (Genesis, BlockFi, Celsius, Voyager, etc.).
In this context, Credora said its proprietary computational technology allows borrowers to prove their creditworthiness while protecting the privacy of sensitive information. The idea is to create a more transparent and open lending market based on robust lending standards.
Regarding credit, it was discovered after the bankruptcy that FTX, in particular, had diverted customer funds to sister companies. For example, Canada’s Ontario Teachers’ Pension Fund, which suffered a loss on its FTX investment, said FTX did not properly disclose information, resulting in insufficient risk scrutiny.
connection: Canadian teacher pension fund “Refrain from investing in the cryptocurrency sector”
In addition to Coinbase and S&P Global, Spartan, Amber Group, CMT Digital, Hashkey, GSR, KuCoin Ventures, Paradigm.co, Pirata Capital, Breed VC, and WAGMI Ventures also participated in this round of funding.
With this funding, Credora has raised more than 2.1 billion yen ($16 million) from investors so far.
S&P Global Focuses on DeFi
Charles Mounts, Head of DeFi (Decentralized Finance) at S&P Global Ratings, a division of S&P Global, commented:
We are pleased to be involved in the trust of the DeFi ecosystem through our investment in Credora. Credora believes it can become a leader in its field through its innovative approach and use of technology.
US financial services giant S&P Global is eyeing DeFi. This month, the company is also looking for a director in charge of DeFi.
Beyond DeFi, the company’s DeFi team said it will build a “holistic business and strategic approach to blockchain, Web3 and the metaverse.”
connection: S&P Global Seeks DeFi Team Director
What is DeFi (decentralized finance)?
Refers to financial services or systems that utilize blockchain and are performed in the absence of a central administrator. Abbreviation for “Decentralized Finance.” DeFi financial services include stablecoin issuance, currency lending, and cryptocurrency exchanges. Many platforms use the Ethereum blockchain.