May 13 (Reuters) – Zest Protocol, a bitcoin lending startup with just six employees, has secured $3.5 million in a funding round led by billionaire investor Tim Draper.
Besides venture capital firm Draper Associates, nearly a dozen investors participated in the round, including Binance Labs and Flow Traders, the company said on Monday.
WHY IT’S IMPORTANT
The funding round marks confidence building up in the crypto lending industry amid a crackdown from the U.S. Securities and Exchange Commission.
Zest operates differently than the firms targeted by the regulator, its founder Tycho Onnasch said. While most such lending platforms operated as a financial institution, Zest is decentralized, he said.
Decentralized firms allow peer-to-peer transactions without the need for an intermediary.
CONTEXT
Zest will allow users to lend out their bitcoin, or borrow against it. Users can avoid selling their bitcoin and instead earn a passive income from it.
Source: REUTER
