The new front-to-end platform offers users all relevant risk-management tools for both borrower and lender, manages liquidations and provides automated margin notifications for borrowers.
TORONTO, June 24, 2024 (GLOBE NEWSWIRE) -- FRNT Financial Inc. (TSXV: FRNT) (OTCQB: FRFLF) (FSE: XZ3) ("FRNT" or the "Company") is pleased to announce its partnership with BitGo, a leading qualified custodian in the digital assets space, and the launch of its new institutional-only lending platform, aiding the origination and maintenance of BTC and ETH-backed loans. The platform offers significant advantages to both lenders and borrowers over existing industry structures.
FRNT's new lending interface leverages a tri-party structure to mitigate counterparty risk by using a bankruptcy remote third-party custodian, BitGo, ensuring that the collateral is securely held in cold storage and cannot be rehypothecated. FRNT's solution minimizes the lender's required engagement while maintaining the benefits and safety of a tri-party structure. Unlike traditional tri-party lending arrangements that demand a high degree of involvement from the lender, FRNT's platform requires the lender only to provide the balance sheet, with FRNT's technology handling all loan monitoring. This streamlined approach offers significant advantages, providing lenders with peace of mind and returns, while borrowers can access liquidity without selling their BTC or ETH, maintaining potential upside in their investments.
"Our platform is designed to provide a seamless and secure lending experience for institutional clients," said Giles Colwell, Head of NA Capital Markets at FRNT. "With 24/7 monitoring, automated margin calls, and a robust liquidation management process, lenders can confidently lend against BTC and ETH without the need to handle the physical assets."
Key features of the new platform include:
Overcollateralization: Loans are typically structured with a starting Loan-to-Value (LTV) ratio of 50%-70%.
No Rehypothecation: Collateral is held with BitGo, a qualified custodian, and remains in bankruptcy-remote cold storage, providing an additional layer of security.
Automated Management: The platform offers 24/7/365 trading capabilities, deep liquidity, and real-time monitoring of collateral health, margin levels, and liquidation points.
Auditability: Utilizing the public BTC and ETH blockchains ensures all transactions are transparent and can be audited in real-time, enhancing trust and security.
The platform aims to address the growing demand for digital asset-backed lending solutions. As the market for BTC and ETH continues to mature, the availability of a secure and efficient lending platform presents a significant opportunity for both lenders seeking yield and borrowers looking to leverage their digital assets without selling them.
"We are excited to partner with FRNT and leverage our extensive collateral management capabilities to assist them in growing their lending platform," said Adam Sporn, BitGo's Head of Prime Brokerage and U.S. Institutional Sales.
"Crypto-backed loans are a key component in institutional integration into the digital asset ecosystem," added FRNT CEO and co-founder Stéphane Ouellette. "For lenders, FRNT's platform provides a unique opportunity to diversify lending book exposure to a less correlated asset class. For borrowers, FRNT's platform offers a secure and transparent means to access dollar liquidity while maintaining long exposure to the collateralized asset. We're further extremely excited to be announcing this launch with BitGo, one of the longest serving and trusted names in digital asset custody."
About FRNT
FRNT is an institutional capital markets and advisory platform focused on digital assets. FRNT, through a technology-forward and compliant operation, aims to bridge the worlds of traditional and web-based finance. Partnering with both financial institutions and crypto native firms, FRNT operates 5 synergistic business lines including deliverable trading services, institutional structured derivative products, merchant banking, advisory and consulting, and principal investments & trading. Co-founded in 2018 by CEO Stéphane Ouellette, FRNT is a global firm headquartered in Toronto, Canada.
About BitGo
BitGo is the leading infrastructure provider of digital asset solutions for businesses, offering custody, wallets, staking, trading, financing and settlement. Founded in 2013, BitGo is the first digital asset company to focus exclusively on serving institutional clients. In 2018, it launched BitGo Trust Company, the first qualified custodian purpose-built for storing digital assets and established BitGo New York Trust in 2021. In 2022, BitGo launched institutional-grade DeFi, NFT and web3 services. BitGo also supports over 800 digital assets on its platform and provides the security and operational backbone for more than 1500 institutional clients in 50 countries, including many of the world's top cryptocurrency exchanges and platforms. For more information, please visit .
FRNT Financial Inc.
Chief Executive Officer
Stéphane Ouellette
investors@frnt.io
833 222-3768
Neither the TSXV nor its regulation services provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable law which may include, without limitation, statements relating to financial and business prospects of the Company, its assets and other matters. Generally, forward-looking statements and forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". All forward-looking statements and forward-looking information are based on reasonable assumptions that have been made by the Company as at the date of such information. Forward-looking statements and forward-looking information are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements and forward-looking information, including but not limited to: the general risks associated with the speculative nature of the Company's business, current global financial conditions, uncertainty of additional capital, price volatility, no history of earnings, government regulation in the industries in which the Company operates, political and economic risk, absence of public trading market, arbitrary offering price, dilution to the Company's common shares, dependence on key personnel, currency fluctuations, insurance and uninsured risks, competition, legal proceedings, conflicts of interest and lack of dividends. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements and forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or forward-looking information. The Company does not undertake to update any forward-looking statement or forward-looking information that is included herein, except in accordance with applicable securities laws.
