A Queensland-based digital currency trading platform aimed at everyday Australians is letting cryptocurrency fans take an equity stake in its company.

Coinstash anticipates raising up to $2.8 million via equity crowdfunding platform Birchal to accelerate its vision and take them closer to offering cryptocurrency-enabled interest-bearing accounts, lending facilities and credit cards.

The platform already allows everyday users to buy and sell 22 different cryptocurrencies, including Bitcoin, Ethereum and Ripple; this new offering will let users do something more with their coins, rather than having them sit idle in a wallet, Coinstash co-founder Mena Theodorou tells Stockhead.

“So basically our vision is to launch three new exciting products – Coinstash Earn, Coinstash Borrow, Coinstash Spend,” Theodorou says.

Coinstash Earn would let users earn a rate of return on their Bitcoins or other cryptocurrencies, Theodorou says, while Coinstash Borrow will allow customers to use their cryptocurrency holdings as collateral and borrow Australian Dollars or another cryptocurrency of their choice.

“If, for example, you don’t want to sell your cryptocurrency, but you’d like to be able to use a portion of it, you can take out a loan with Coinstash Borrow, pay an interest rate, and have early access to your funds,” says Theodorou.

Coinstash Spend would work somewhat similarly, except with a credit card that has its credit limit determined by the user’s crypto holdings rather than employment history. Like any other credit card, If users don’t pay off the balance each month,  they would be charged interest.

Alternative to DeFi and offshore platforms

There are products already on the global market that allow crypto holders to earn interest – Coinstash aims to be one of the first players based in Australia that offer these services.

“Decentralised finance” products such as Curve, Compound or Balancer are backed on smart contracts that might have hidden flaws, Theodorou notes.

“It’s publicly available, so you’re able to check the code, but I don’t think everyone is a developer, so they can’t really verify it themselves.”

Flaws in the smart contract that set up the Decentralised Autonomous Organization (DAO) on Ethereum infamously allowed attackers to drain 3.6 million Ether from its wallet in 2016, while the next year hackers were able to steal 150,000 ETH from the Parity wallet due to a vulnerability in its multi-sig software.

There are also centralised platforms that allow users to earn interest on crypto – “but they are not based in Australia, that’s the value-added to what we are doing,” Theodorou notes.

“It’s more of a trust thing – because we are located here (in Australia), customers have that assurance that their funds are not being subject to a company that’s based in Malta,  Estonia or any other foreign country.”

“If something were to go wrong, we are here in Australia, so you are protected under Australian law.

“Not saying that is going to happen, but if it happens to a company overseas, the investor’s recourse becomes very limited,” Theodorou says.

Many of these companies are supposed to be licensed in Australia to do business here, but because they are offshore, there’s no real way for regulators to enforce that, he adds.

Coinstash aims to be one of the first licensed platforms in Australia to have these solutions.  “We’re looking to take proper processes and ensure that customers are aware that we’re not mucking around with this; and that we are serious about it.”

High demand

During an “expression of interest” period that ended this Monday 29th, over 1,700 Australians expressed a desire to invest.

“Birchal mentioned to us, compared to some previous campaigns, we more than double their expressions of interest,” says Theodorou.

The private investment period began at 10 am today.

Within the first 30 minutes of the private offer, Coinstash had already raised over $600,000 from 42 different investors. They have further crossed the $1 million mark after 5 hours of going live.

In addition to owning a stake in Coinstash, early investors are offered rewards, such as a credit on volume traded on Coinstash that is paid out in Bitcoin.

For more information about the Coinstash equity crowd funding visit Birchal here.

This article was developed in collaboration with Coinstash, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

 Any documents linked or referred to in this article were not selected, modified or otherwise controlled by Stockhead. Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in the documents linked or referred to in this article.

 

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