The domino effect linked to FTX has had the better of Coinhouse’s crypto books, which has offered a full refund to some of its customers. These investment products were launched in October 2021, so in the midst of a bull market for cryptocurrencies. The former House of Bitcoin was forced to freeze them on Nov. 17, 2022 after one of its major counterparties, Genesis, announced it was suspending opening new loans due to the “unprecedented turbulence in the market” related to the fall of Samuel Bankman-Fried’s empire.
Genesis had become an essential intermediary for crypto companies to generate returns. It contributed, for Coinhouse, up to 40% for the USDT booklet – Tether’s stablecoin -, with an equivalent level for the Ethereum booklet. The contribution for the Bitcoin passbook stood at 38%.
100% refunded.
less than $6,000
Faced with this situation “exceptional” how does it qualify Agefi its CEO Nicolas Louvet, Coinhouse, which claims nearly 2,560 crypto booklets, has decided to compensate some of its clients 100%. Below the $6,000 equivalent invested on Nov. 17, investors had the option of recouping their entire stake with interest. Above this amount, they could directly recover a variable percentage depending on the sums deposited, the rest being conditional on the release of funds currently blocked with counterparties such as Genesis. Coinhouse users had between December 22nd and 30th to decide and make their choices known.
According to Coinhouse, customers holding 92% of passbooks have already recovered all of their investment and 6% some. Finally, 2% of passbook customers did not sign up to the proposed agreement and will have to wait for any release of funds currently with counterparties, if such a release occurs one day.
“Clients who have listed their cryptocurrencies in our passbooks are convinced. They chose to leave their money with us even after the collapse of Terra or the failure of Celsius. It was therefore unthinkable for us not to accompany them in this difficult moment for the ecosystem. This is generally the sense of our commercial gesture”explains the CEO of Coinhouse.
A new offer
rendered in 2023
Crypto passbooks were Coinhouse’s flagship offering and part of the focus of “democratization of cryptocurrency investment” offering a yield solution that shares many commonalities with those of the traditional financial world. Last July, the company that had raised 40 million euros the previous month had even made investment in its one-euro carnets accessible, drastically lowering the entrance fee previously set at 20,000 euros.
Coinhouse is working on launching new yield offerings but which will not be similar to how passbooks work, largely based on CeFi solutions – centralized finance in cryptographic jargon. It’s about entrusting clients’ cryptoassets to centralized companies like Genesis to generate returns.
Coinhouse works in particular on the offers of staking out, the fact of immobilizing cryptoassets in a blockchain to participate in its security in exchange for a remuneration. Olivier Kouvarakis, head of product and marketing at Coinhouse, is hoping for a rollout of this offer “as soon as possible in 2023”. In parallel, Coinhouse launched a DCA offering (average cost in dollars), i.e. a planned investment to cushion the risk on an asset as well as a mandate-managed management offer for clients.