Atomic Capital Makes Crypto's Most Aggressive Lending Offer Yet

Atomic Capital, an asset tokenization startup founded last year, is entering the crypto-backed lending field, with a seemingly aggressive loan offer.

To compensate for the additional risk, Atomic will charge interest rates of 11 percent to 13 percent, considerably higher than the 4.5 percent to 8.95 percent rates charged by competitors.

While the high end of that range may sound farfetched, Atomic CEO Alexander Blum claims the firm already has requests for $80 million worth of loans.

Atomic Capital raised $3.4 million in a security token offering in October, and $250,000 from Baroda Capital as a seed investment.

Atomic won't be funding the loans itself, but rather brokering them for Lockwood Group, a Luxembourg-based investment firm that will assume the risk and take custody of the borrowers' crypto collateral.

"We will be a trusted third party that is regulated in the U.S.," Blum told CoinDesk, explaining that Atomic Capital will provide the technological side of the product.

Blum told CoinDesk that since Lockwood and not Atomic is issuing the loans, Atomic Capital doesn't need state lending licenses.

A spokesperson for Atomic said the loans will be available in any U.S. state as long as the customer passes know-your-customer and anti-money-laundering checks.

"The loss of the cryptocurrency while in the custody of Lockwood either by poor trading or some type of cybersecurity failure would not absolve the legal obligations Lockwood has to a borrower in returning the collateral as scheduled. Atomic is comfortable with this because of both Lockwood's highly experienced, global team of financial professionals and significant capital reserves."

"In line with standard collateral-backed lending processes, borrowers are giving custody over to the lender for the term of the loan and under-collateralized loans must be restored to acceptable LTV ratios to maintain good standing as per the terms of the contract," Klein told CoinDesk in a message relayed by Atomic's spokesperson.