Moon platform launches crypto-backed mortgage
add Month mortgage to the list of fintechs offering crypto-backed mortgages.
Six months after raising $3.5 million in a seed round, the Miami-based cryptocurrency lending platform announced Tuesday that it launched a product that allows investors in Bitcoin, Ethereum and USDC to use their assets to secure financing for real estate purchases .
“The use case for crypto has to go beyond the investment potential. It has to be about how an investor can use it for real-world gains,” Tristan Marino, who co-founded the company with Aaron Nevin in 2022 after their frustration with the lack of digital asset applications, said in a statement.
Since 2021, other fintechs have launched crypto loan products, including Toronto-based ones Lead and Miami-based Milo. Figureled by earlier SoFi CEO Mike Cagney, has placed big bets on crypto-backed mortgages and launched the company’s first crypto-based product earlier in 2022.
Moon’s crypto loan product has a minimum loan amount of $1 million. The company said on its website that “for now, as a good rule of thumb, [investors should] plan to provide 100% security. Future products may have different security requirements.”
Because Moon is not a bank, crypto assets are stored at Anchorage Digitala crypto custody firm that is also the first federally chartered crypto bank in the U.S. In light of the current banking crisis, Moon also clarifies on his website that crypto assets are not FDIC-insured products, meaning they can lose value.
Moon Mortgage does not liquidate investors’ security when crypto loses value unless it falls to a pre-agreed value during the underwriting process. Clients maintain ownership of the stored crypto and total exposure to the markets, allowing them to capture the appreciation of the asset.
The company said it can set up a loan in six steps, with a closing time of as little as 14 days. The product is available to home buyers in Florida, Texas and Colorado and will be open to investors in most states for investment properties. HousingWire sent an inquiry to Moon regarding the product’s mortgage rate, but did not receive a response by the time of publication of this article.
Moon also launched a product that allows investors to take out loans against their digital assets while still retaining some control over those assets. Called “Trade & Borrow,” the product is available with one-, three-, and six-month terms, but is renewable. There are no prepayment fees and no origination fees, the company said.
“Against the backdrop of a very tough year for crypto investors, there is an obvious need to provide more options to help create tangible value – to ensure investors can have as many options as possible, just as traditional retail investors have,” Nevin, co-founder and CEO of Moon Mortgage, said in a statement.
The global cryptocurrency market capitalization stood at $1.2 trillion on Tuesday afternoon, down from $2.2 trillion on the same day last year, according to the crypto-asset price tracking website. CoinMarketCap.
