CLST, an institutional-only lending and borrowing venue for stablecoins and crypto assets, has successfully closed a multi-million USD seed round, led by Spartan Group, with participation from Coinbase Ventures, Kraken Ventures, GSR, Menai Financial Group, Luno Expeditions, a subsidiary of Digital Currency Group, and TX Ventures – the VC investment arm of TX Group.
A one-stop-shop for peer-to-peer lending and borrowing, CLST attracts digital asset lenders and borrowers such as hedge funds, trading firms, treasuries, asset managers, and crypto banks seeking automated digital asset collateral management features. Capitalizing on the recent immaturity of the crypto debt market which led to the financial distresses of market leaders, CLST is effectively automating bilateral price negotiation and settlement for the unsecured and collateralized short-term debt market. With a large number of institutions participating in the network after soft launching in early 2022, CLST is going live with a wide market version of the application later this year.
“CLST sits at the nexus of the crypto asset short-term debt market and traditional financial market. In tandem with our world class investors and partners, we are establishing a market for stablecoins, digital assets, fiat, and beyond – the ‘new money,’” said Michael Guzik, founder and CEO of CLST. “With the new funding, CLST will bolster its peer-to-peer infrastructure through increased operational and market expansion, ultimately creating an ease of lending that has not yet been made possible between institutional entities, until now.”
“With the current market environment exposing points of failure, it is clear that the crypto industry needs a better way to manage liquidity and counterparty risk as it continues to mature,” said Leeor Groen, Director at Spartan Group. “We are glad to back the CLST team as they launch the leading platform to facilitate both institutional borrowing and lending as well as treasury management solutions for digital asset market participants.”
The absence of counterparty risk assessment has also plagued the lending industry, prohibiting sophisticated parties from participating in a lucrative sector of the industry. Currently, lenders have limited visibility over a borrower’s trading risk, while borrowers have no oversight over the collateral deposited to obtain loans. To mitigate this roadblock, CLST provides “one click” financial data sharing and collateral management processes so that lenders and borrowers can accurately and efficiently assess their relationship pre-trade and collateral value post-trade.
CLST addresses the requirements of any principal and agent lender willing to automate the entire loan management process. Features such as electronic quotation, negotiation, wallet to wallet transaction, collateral management, and transaction reporting enable any trade participant to engage in short-term debt markets. The inherent lack of infrastructure to connect lenders and borrowers hinders institutional adoption and depth of liquidity. This is why automation and security in collateral management, combined with counterparty risk assessment, are key pillars of CLST.