Binance Pool is the latest entity to join the growing ranks of alternative lenders looking to provide capital to the distressed mining industry.Read MoreCoinDesk
The crypto winter is taking a toll on companies that man the virtual mines, which has led to cryptocurrency exchange Binance starting a lending facility for bitcoin (BTC) miners.
Binance Pool has started a $500 million lending project for private and public miners. The miners will need to pledge security in the form of physical or digital assets for the loan, which will have a duration of 18-24 months.
Binance Pool recently opened up a mining pool for ETHW, the forked version of Ethereum that retains the blockchain’s original proof-of-work (PoW) underpinnings.
Binance isn’t the only firm that is looking to support the struggling crypto mining industry, Jihan Wu, the founder of crypto mining rig-maker Bitmain, is also setting up a $250 million fund to purchase distressed assets from mining firms.
Decentralized Finance (DeFi) platform Maple Finance has also established a lending pool with a 20% interest rate to provide miners with working capital. Crypto asset management firm Grayscale has also formed an investment vehicle to help investors take advantage of the low prices of bitcoin mining infrastructures.
Grayscale is a subsidiary of Digital Currency Group (DCG), the parent company of CoinDesk.
The downturn in the crypto market and the planned transition of Ethereum to proof-of-stake (PoS) has hit miners hard. In late September, crypto miner Compute North filed for bankruptcy with $500 million in outstanding debt owed to at least 200 creditors.
Publicly traded mining company Riot Blockchain (RIOT) is down 70% year-to-date, while Marathon Digital Holdings (MARA) is down 65% for the same period.
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