Eqonex Group Launches Crypto Lending Marketplace for Institutions Seeking Transparency

Blockchain services company Eqonex Group, previously known as Diginex, has introduced a novel peer-to-peer cryptocurrency lending marketplace. This platform is designed with automatic protocols to cater specifically to institutional clients seeking greater transparency than what is typically available in the over-the-counter (OTC) market. However, these institutions are wary of decentralized finance (DeFi) protocols due to concerns over flash loans and hacking incidents. Eqonex’s Chief Risk Officer, Charlie Beach, highlighted the lack of transparency in the OTC lending market, particularly regarding interest rates.
Eqonex aims to address these issues by offering a more transparent and secure lending environment. The platform plans to serve a range of needs, from supporting trading strategies to providing working capital for bitcoin miners wanting to retain their coins during price dips. Crypto lending, according to Beach, can enhance liquidity and price discovery for crypto assets, despite introducing systemic risks to the market.
To mitigate these risks, Eqonex will not engage in rehypothecation of collateral—a practice where banks and brokers use clients’ posted collateral for their own purposes. Instead, it will charge a 1.3% annual fee on loans. Most of the loans offered will likely range between $1 million to $20 million, with discussions on larger loans up to $300 million. Loans on the Eqonex platform will be overcollateralized, with stringent margin requirements to ensure safety.
The automated system implemented by Eqonex for managing collateral includes storing it in cold storage immediately after loan issuance and issuing automatic margin calls if the collateral value drops to a certain level. This system, along with a rigorous know-your-customer (KYC) process, aims to build institutional trust in the platform.
Joseph Kelly, CEO of Unchained Capital, praised Eqonex’s approach, noting that overcollateralization and avoiding rehypothecation could increase institutional comfort with the platform. Eqonex also simplifies the lending process by eliminating the need for pre-funding loans or holding deposits on the platform, with automated settlement instructions for both lenders and borrowers.
Looking forward, Eqonex aspires to grow its loan book into the hundreds of millions by next year and to integrate the peer-to-peer lending platform into a broader prime services offering. The move reflects growing interest in crypto lending from a variety of organizations, including traditional banks and corporate treasuries, signaling a significant shift towards mainstream acceptance of cryptocurrency in financial services.