New Report Details Growth of Crypto Lending, Need for Consumer Protection

NEW YORK, June 8, 2022 /PRNewswire/ -- A new report released today by the Digital Asset Advocacy Group (DAAG) provides new details on the rising use and risks of crypto lending, a financial technology that has grown in tandem with the widespread adoption of cryptocurrencies. Findings show that while innovative tools like crypto lending effectively harness the power of new technologies, there are risks caused by bad actors operating in the new space and more must be done to educate and protect consumers.

The new report, "Crypto Lending and the Need for Consumer Protection," highlights the increased adoption of crypto in the U.S., particularly by millennials. Similarly, there is a rise in acceptance of crypto in retail business, with more than 18,000 companies reporting that they accept crypto as a form of payment for products or services.

It goes on to detail the growing popularity of crypto lending is gaining popularity exponentially. For instance, the demand for crypto loans from crypto lender, Genesis, was seven times higher in 2021 than in 2020 while crypto lender BlockFi saw an almost 2,000% increase in assets under management during that same time frame.

"There's no doubt that crypto and its accompanying financial tools are gaining popularity and that trend will only continue to rise. And as new technologies such as crypto lending are developed and adopted, education and protecting consumers must be top of mind," said Laura Adams, DAAG member and financial expert. "Unfortunately, consumers are already facing significant issues in their dealings with some crypto lenders."

A number of these issues are described in DAAG's new report, including instances of cyber-attacks, platforms that have already filed for bankruptcy and lenders sued by their customers for failure of notice. Additionally, there are numerous complaints of poor customer service, particularly over the last month following the collapse of Terra's LUNA coin and related fall out impacting Nexo customers.

Advocating that protecting consumers should be the top priority, DAAG's report provides advice on the basic protections consumers should expect from crypto lending companies. Loan agreements should have terms and conditions that are easy to understand, and consumers should receive adequate notice from lenders before any changes are made to the agreement or collateral is liquidated. Crypto lending companies should be regulated by the proper regulatory authorities and have sufficient customer service departments with the ability for consumers to receive responses in a timely manner.

Finally, the report provides solutions for consumers who have been harmed by bad-acting crypto lending companies, pointing them to contact their state's regulatory agency and submit complaints to the Consumer Financial Protection Bureau.

Digital Asset Advocacy Group (DAAG) is a non-profit organization that promotes safe and regulated digital currency lending, depository, and other consumer financial practices. DAAG will accomplish its mission through raising awareness on current harmful trends, developing and promoting industry standards with a focus on protecting consumers and businesses, educating the public on the digital currency industry as a whole, and advocating for digital currency stakeholders, consumers and regulators to advance a more secure and ethical emerging market.

Learn more at digitalassetadvocacy.org and connect on Twitter at @DigiAssetAdv.

Contact: [email protected]

SOURCE Digital Asset Advocacy Group