Ex-Cantor execs launch crypto lending platform in expectation of Bitcoin ETFs

The new platform Tokenet hopes to capitalize on institutional interest following the potential approval of a spot Bitcoin ETF.

A new crypto-lending platform dubbed Tokenet says it will service what it expects to be an influx of institutional clients following the potential United States approval of spot Bitcoin (BTC) exchange traded fund (ETF). 

The platform was launched by a team of executives who previously headed financial services firm Cantor Fitzgerald who since joined a new brokerage firm called Digital Prime Technologies.

In a Nov. 7 statement, Tokenet said it will allow firms to borrow and lend digital assets while managing collateral positions. The platform also offers risk management tools which allow institutions to mitigate counterparty risks as they would in traditional finance.

Digital Prime Technologies’ Tokenet platform is already backed by a number of crypto firms including Hidden Road Partners, Xapo Bank, EDX Clearing and DV Chain.

“Given the current markets and regulatory headwinds, Tokenet’s launch is an important and exciting step towards establishing trust and transparency in digital asset lending,” said James Runnels, Digital Prime Technologies co-founder and CEO.

Tokenet joins a growing roster of companies seeking to embrace crypto lending following the collapse of lenders including Voyager Digital, Celsius Network and BlockFi.

In a bid to bolster declining revenues, crypto exchange giants including Coinbase and Binance have leaned heavily on lending offerings all the while assuring investors that they’ve learned from the mistakes of the crypto lending disaster of 2022 which bankrupted a number of high-profile firms.

Related: Spot ETF-induced Bitcoin rally isn’t guaranteed to stick: Analysts

Tokenet’s launch is buoyed by the wider crypto market enthusiasm for an impending approval of a spot Bitcoin ETF. While an approval is not guaranteed, Bloomberg ETF analysts have pegged the likelihood of an approval at 90% before January next year.

I’ve gotten a lot of questions regarding my current view on Spot #Bitcoin ETFs over the last couple weeks. This is the first section of the note I put out yesterday with @EricBalchunas.

TLDR: Our view hasn’t changed much https://t.co/dRAm5IsdQf pic.twitter.com/Htsi3n2XxV

— James Seyffart (@JSeyff) October 13, 2023

If a spot Bitcoin ETF is approved, crypto lending firms such as Tokenet stand to gain from the influx of institutions looking to borrow Bitcoin.

Runnels was previously the managing director at Cantor Fitzgerald, while the COO of Digital Prime Technologies, Bob Sherry was previously COO of Prime Services at Cantor until 2018.

Magazine: Beyond crypto — Zero-knowledge proofs show potential from voting to finance