Finance

Crypto Financing, Is It Possible?

If you have a smart business idea, you have to convince investors of your vision. In the beginning, it is often family and friends. You could be even seeking financial help from a lending club or traditional banks. Later, ideally, business angels and investors come in who provide venture capital. A time-consuming process.

The Top Crypto-Backed Loan Platforms

Now, there’s what is called crypto lending as explained by Cointelegraph. It works much like a regular loan but within the limitations of cryptocurrencies. This service connects willing lenders to seeking borrowers using online platforms. Lenders lend their Altcoins, Ether, or Bitcoins to borrowers under agreed terms and regulations.

The entrepreneur Zoe Adamovicz can imagine it all easier, faster, and cheaper. With her start-up “Neufund”, the Polish-born artist, together with her partner Marcin Rudolf, wants to create a platform on which investors can participate in start-ups using the Ethereum cryptocurrency. It is an experiment that no one can say at the moment whether it will succeed and what risks are involved for the investor. Bafin’s financial supervision is in the process of dealing with this business model.

The company is financed through venture capital. It recently mobilized $ 12 million from investors for the platform. The financiers include, for example, the investor Frank Thelen, who is known to a wider audience as a jury member of the start-up show “Höhle der Löwe”. Neufund has dubbed this process the “Initial Capital Building Mechanism” (ICBM). Supporters, therefore, commit funds that they can later invest on the platform in companies.

Adamovicz and Marcin are experienced entrepreneurs. In 2014, they sold their self-founded Xyo app search engine to an American, listed company. It is important for the manager to differentiate herself from so-called initial coin offerings (ICO). “New discovery does not make an ICO,” she clarifies. “No euro is used by the ICBM for the company. We don’t manage this money either. ”

She doesn’t want “newfound” to be lumped together with companies that use intransparent ICOs to collect money by issuing tokens. Much can be hidden behind tokens: some companies promise to share in possible future profits, others only declare the collected money as a “donation”. “At the moment, investors who finance companies using cryptocurrencies cannot be sure whether the tokens issued will actually be used for the purposes for which they were announced,” Adamowicz describes the dilemma. This is exactly what is supposed to work differently on the “Neufund” platform.

The ten largest cryptocurrencies

There, companies can finance themselves with so-called equity token offerings (ETOs). Adamowicz wants to ensure that the investor who participates in a company on the Neufund platform also benefits from possible profits or sales proceeds. At the same time, investors have to bear possible losses. “With an ETO, the investor acquires rights to the company, which he can also assert, if necessary,” she emphasizes. This is a big difference to tokens, which are awarded in the context of an ICO.

Posted by Laney Seward in Cryptocurrency, Finance

Amidst Continuing Hacks and Scams, How Should the Cryptocurrency System Move Forward in 2020?

It is now widely recognized that the cryptocurrency financial system has become a burgeoning industry. So much so that it has become ripe with opportunities for fraudsters and hackers, as millions have become victims of cryptocurrency investment scams and cyber attacks. Apparently, the common factor that has made victims vulnerable to criminal elements is their complacency.

They see the blockchain system as having sufficient shield against the prying eyes of financial regulators and tax enforcers. Yet they also take it to mean that the entire workings of the cryptocurrency financial system is safe from the schemes devised by scammers and hackers. .

Victims tend to overlook the fact that the beginning and end of cryptocurrency transactions still require participation of banking institutions. Not unless one is a cryptocurrency miner who gets to own a unit of cryptocurrency for every block of encrypted transactions he or she adds to the blockchain system.

Purchasing cryptocurrency with real cash, is still the fastest approach to owning digital money. Mainly because it takes high-powered computers to solve complex encryptions plus a lot of hard work is involved. Now in order to have real-world value, cryptocurrencies have to be cashed out through bonafide bank accounts or central bank-accredited payment processors.

Actions Taken to Strengthen the Security of Financial Transactions Involving Cryptocurrency Exchanges

As far as The Society for Worldwide Interbank Financial Telecommunication or SWIFT is concerned, they have reacted to cyber attacks by reinforcing cybersecurity controls, and by identifying the weakest players in the SWIFT community.

Moreover, this organization of global financial telecommunication experts, makes sure that information about the modus operandi of known cyber attackers, are disseminated worldwide to prevent further occurrences of hacking incidents.

In the cryptocurrency system, which is basically a decentralized method of exchanging digital funds, whilst working outside of a central bank or a recognized administrator, members of the cryptocurrency community rely on each other in preventing scams and hacking incidents.

Cryptocurrency service providers like operators of crypto exchange platforms and digital asset custodianship, have also taken steps to prevent digital funds from being stolen. However, the fact that many crypto-related investment frauds and illegal cash-outs still happen, the use of encryption controls, of blacklisting addresses and of capping cash-out transaction, have not proven as sufficient deterrents against criminal elements and their modus operandi.

What Financial Experts Recommend to the Cryptocurrency Community in Moving Forward to 2020

Many articles written about cryptocurrency fraud suggest that it is not only the technology of the system that requires strengthening. Proponents and players in the digital currency market must acknowledge that it takes more than encryption to provide the necessary check and balances in ensuring the validity of blockchain transactions.

Improving the cryptocurrency system also requires risk management and adherence to basic financial controls. Particularly that of segregating duties, functions and roles among those who have access to the blockchain system to deflect conflicts of interests. Segregation pertains to those who have custody of customer assets, as well as from those who facilitate trading or exchanges of cryptocurrency funds.

Most important of all is to instill the importance of education or know-how among participants, before entering into cryptocurrency transactions.

Rather than have digital asset owners and potential investors rely on information provided by influencers, participants should have a clear understanding of how crypto-exchanges and fund transfers work; of the risks involved, as well as have accessible information about established institutions and organizations that can help in verifying the legitimacy of digital investment offers.

Posted by Madelina Feliks in Cryptocurrency, Finance

Settlement Funding: A Cash Flow Remedy For Injured Persons And Legal Professionals

Pre-Settlement Loans is a comparatively recent financing approach to plaintiffs associated with lawsuits plus the attorneys addressing them over a contingency charge basis. There are numerous terms applied interchangeably to legal funding. This includes pre settlement loans auto accidents, third party financing, lawsuit funding, suit settlement money, presettlement auto financing, post-settlement financing, lawsuit financial loans, and lawsuit finance.

Litigation Funding, Shaking Up The Legal Industry

What is a pre-settlement loan or legal funding?

As outlined by Legalist, legal funding is considered the process whereby both injured persons and lawyers can get financing litigation or other legal related funding through a third-party funding business. These financial institutions provide assistance to their clients in return for a percentage of their settlement money. In line with the Litigation Financing Journal, these kinds of transactions happen to be “ nonrecourse, meaning that in case the client seems to lose the case, the funder is unable to pursue the client’s various other assets not related to the lawsuits to gain pleasure. ”

A third-party financing company is just the organization that provides a cash advance, or perhaps legal money, to the plaintiff or the legal practitioner. Such businesses that provide these kinds of advances are usually known as legal funding firms.

If the individual (or legal professional working on a contingency payment basis) would not win his case, chances are they are not in charge of repayment in the funds advanced by the third party finance company. That’s why using the term “advance” is more appropriate than the term “loan. ” Because there is zero payment important unless there is a favorable result in terms of money, award or perhaps verdict, legal funding advancements are not financial loans but are, rather, nonrecourse orders. The “ nonrecourse ” concept is very important to understand since it is the main aspect differentiating legal funding via traditional funding such as financial loans and lines of credit.

Mainly because legal financing transactions happen to be nonrecourse, there exist some companies struggling to recoup their particular investment. Because of this, legal financing is more high-priced than classical financial choices such as loans, credit lines, and low-rate charge cards. So, why not merely use a more affordable option?

Creating Paths To Success

Though credit lines and bank loans are much less expensive cashflow solutions, these choices are not always functional or attainable. Banks generally require a guarantee in the form of nonliquid assets (such as an inventory portfolio, genuine or real estate property holdings). Therefore, if the consumer is unable to produce payments, the bank can recover their investment selling the collateral.

Other Options for The Plaintiff

Injured persons should get a loan or a credit line from a lender, use their very own credit cards, demand financial support from relatives and buddies, use cash stashed away within a savings account or perhaps take out credit against all their 401(k). Or if you have a crypto fund, you could borrow against your crypto funds. Should you be a lawyer, make an effort to increase affiliate fees and referrals, expand on your own network by attending community events, employ credit cards and savings accounts or obtain a small business financial loan.

So, whether you are an individual involved in a lawsuit and need funds while anticipating a settlement or perhaps an attorney needing capital holding out to receive the contingency cost, legal funding can be an important solution to your money flow challenges. Just make sure to exhaust less expensive financing alternatives first, if possible.

Posted by Laney Seward in Finance