Crypto Lending – Stay away from these platforms (part 4/5)
Not all crypto lending platforms are created equal. While it may be nice to earn interest on your cryptocurrency holdings, it’s not that nice to lose them or get them stolen somehow. While most people invest in cryptocurrencies to earn a profit, not many pay enough attention to the security of their holdings.
This part of the Crypto Lending guide will show two lending platforms that people should consider avoiding. This, of course, does not mean they are unusable. However, these lending platforms have critical flaws that might impact your holdings in a bad way.
XCOINS is a company founded in August 2018 by Sergey Nikitin. Nikitin decided to leverage PayPal and make this operation work. XCOINS lenders allow people to borrow their BTC funds; in return, they get monthly PayPal payments at various predetermined interest levels.
The main problem here is that XCOINS uses PayPal. This makes a lot of room for scams due to how PayPal operates in this domain. Someone can use XCOINS to borrow your BTC, go to PayPal and claim they never got it, and then file a payment reversal with PayPal, which will almost guarantee their funds back.
XCOINS explicitly announced that, in this case, there is no help or support whatsoever from XCOINS. Solely for this reason, XCOINS is a walking red flag when it comes to lending. On top of that, the platform is not exactly the best when it comes to good interest rates on crypto lending.
Salt lending platform made the news for being the first and only crypto lending site of that time. The company was founded in March 2016 by Shawn Owen. It quickly gained much popularity through its ICO. However, while their ICO promised many things (such as loans in many US states where there is no legal ability for SALT to provide such services), they never came through.
Ever since the public saw that many promises did not come to fruition, the project started experiencing more and more speed bumps. They have been under investigation by the US SEC for not declaring their ICO as security. This is not only a problem for the owners, as it can lead to the freezing all of their users’ assets. While they are working on this, the SEC pointed out to many red flags. On top of that, the founder and CEO Shawn Owens has stepped down from his position.
If we compound all this information, we can clearly see that SALT is currently far off from being a safe lending platform.
Check out the fifth (and last) part of our Cryptocurrency Lending series, where we will talk about various scams as well as about what cryptocurrency lending platforms could bring us in the future.
