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Crypto Credit Bubble Is About to Burst, Warns Group of Wall Street Traders

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  • Alex Dovbnya
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    Wall Street vets believe that the cryptocurrency credit could experience a massive blow-up

Crypto Credit Bubble Is About to Burst, Warns Group of Wall Street Traders
Cover image via www.123rf.com

Cryptocurrency lending has exploded over the past few years, and it now represents a $5 bln industry. 

According to a Bloomberg report, which cites "a group of former Wall Street traders," this growth might be way too quick, which instills fear of another bubble. 

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The quick rise of crypto lending was propelled by the great Bitcoin crash that took place in 2018. Instead of selling or holding their coins at lower prices, many wanted to earn interest on their not-so-valuable coins and lend them out.

BlockFi CEO Zac Prince says that their business, which is backed by Galaxy Digital boss Mike Novogratz, is doing great without any late payments or losses.  

Genesis Capital, one of the jewels in the crown of Barry Silbert's Digital Currency Group, has originated more than $3.2 bln in crypto and cash loans since March 2018. Genesis Capital's launch had incredibly good timing given that it managed to capitalize on a year-long bear market.     

CEO of Genesis Capital and Genesis Trading Michael Moro claims that market participants should understand the risks in the crypto lending sector.

“Whether folks understand risk is where the scariness comes in. I see more competition and that leads to prices that don’t make sense relative to the risk and collateralization," Moro told Bloomberg.    

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Back in September, Ethereum co-founder Vitakil Buterin claimed that decentralized finance (DeFi) products shouldn't be treated as a safe investment.    

As reported by U.Today, Malta-based cryptocurrency exchange also recently ventured into crypto lending by allowing its users to earn interest on three coins, which shows that this niche market is becoming very crowded.   

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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Ripple Once Again Tries to Toss Class-Action Lawsuit, Insists XRP Is Not a Security

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  • Alex Dovbnya
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    Ripple makes a final push to dismiss the damning class-action lawsuit ahead of a court hearing that is scheduled for January 2020

Ripple Once Again Tries to Toss Class-Action Lawsuit, Insists XRP Is Not a Security
Cover image via 123rf.com

Ripple has once once again asked a federal court to dismiss the pending class-action lawsuit over selling illegal securities, a new court filing shows.

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The company reiterates the same "statue of repose" argument, which means that the plaintiffs failed to meet a legal deadline for filing the suit. Ripple started selling XRP to retail investors back in 2013, which means that it was way too late to bring legal actions against it back in summer 2018 after a bar to a lawsuit was imposed in 2016.    

The blockchain behemoth also continues to insist that XRP is not a security, but it called this issue "irrelevant" to their latest motion, which is why it didn't address this point in-depth. It's not the first time that Ripple tries to dodge the big question that is the cornerstone of the long-lasting legal battle. 

"XRP is not a security, but that is irrelevant for purposes of this motion. Even if XRP were a security, Plaintiff's claims still fail as a matter of law,” the filing said.   

Ripple's previous attempt to throw the suit out of the court didn't bode well. As reported by U.Today, Bradley Sostack, the leading plaintiff in the ongoing case, believes that the defendants are still liable for selling illegal securities. The parties are expected to duke it out in court in January 2020.  

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XRP's status as a security remains a point of contention within the cryptocurrency industry. Crypto influencer BitLord recently slammed Ripple for dumping their native tokens on investors to acquire businesses.    

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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