The domino effect associated with FTX may have been right about Coinhouse’s crypto brochures, which offered a full refund to some of its customers. These investment products were launched in October 2021, then in the middle of a big market for cryptocurrencies. The former House of Bitcoin was forced to freeze them on November 17, 2022 after one of its most important counterparties, Genesis, announced that it was suspending the opening of new loans due to “unprecedented turbulence in the market” about the fall of Samuel Bankman-Fried’s empire.
Genesis had become an essential mediator to allow crypto businesses to generate returns. It contributed, per Coinhouse, up to 40% for the USDT booklet – Tether’s stablecoin -, with an equivalent level for the Ethereum booklet. The contribution to the Bitcoin ledger was 38%.
Faced with this situation “extraordinary” as qualified Agefi Its CEO Nicolas Louvet, Coinhouse, which claims about 2,560 crypto wallets, has decided to compensate some of its customers 100%. Under the equivalent of $6,000 invested on November 17, investors had the opportunity to recover their entire stake with interest. Above this amount, they can directly recover a variable percentage depending on the amounts deposited, the rest is conditional on the release of funds currently blocked with parties like Genesis. Coinhouse users had to decide and make their selections known between December 22 and 30.
According to Coinhouse, customers holding 92% of the books have already recovered their entire investment and 6% a portion. Finally, 2% of the passbook customers have not signed the proposed agreement and will have to wait for the possible release of funds currently with the parties, if such a release ever occurs.
“Clients who have placed their cryptos on our books are convinced. They chose to leave us their money even after Terra crashed or Celsius went bankrupt. Therefore, it was unthinkable not to accompany them in this difficult moment for the ecosystem. This is generally the meaning of our trade gesture”explains Coinhouse’s CEO.
A new offer
yield in 2023
Crypto passbooks were Coinhouse’s core offering and was part of the objective of “democratizing crypto investing” offering a yield-i solution that shares many points in common with those of the traditional financial world. Last July, the company which raised 40 million euros last month it had even made it accessible to invest in its notebooks from one euro, drastically reducing the entrance ticket previously set at 20 thousand euros.
Coinhouse is working on launching new yield offerings, but which will not be similar to how passbooks work, mostly based on CeFi solutions – centralized finance in crypto jargon. It’s about trusting clients’ cryptoassets to centralized companies like Genesis to generate returns.
Coinhouse works in particular to the offers of standing up, the fact of immobilizing cryptoassets in a blockchain to participate in its security in exchange for a reward. Coinhouse’s Head of Product and Marketing Olivier Kouvarakis hopes for a launch of this offering “As soon as 2023”. In parallel, Coinhouse launched a DCA offering (average dollar cost), means programmed investment to mitigate risk on an asset, as well as a managed mandate management offering to clients.