In the middle of last year, Cantor Fitzgerald revealed plans to start a Bitcoin lending business. Today its former CEO Howard Lutnick is now the US Commerce Secretary. For the Bitcoin lending solution, it has partnered with two digital asset custodians, Anchorage Digital and Swiss headquartered Copper.
“We are thrilled to partner with Anchorage Digital and Copper, whose industry-leading security solutions will help us deliver best-in-class digital asset custody services to our clients,” said Michael Cunningham, Head of Bitcoin Financing at Cantor Fitzgerald. “We are launching with $2 billion in initial financing and expect to substantially grow the operation over time.”
Anchorage Digital is the only federally chartered digital asset bank, receiving its charter just before the end of Trump’s previous administration. The company’s backers include Visa and KRR, and it has raised close to half a billion in funding. It will also act as collateral manager for Cantor.
“Our partnership marks a major step forward for the Bitcoin financing ecosystem—built on the safety and security of federally regulated digital asset custody,” said Nathan McCauley, CEO and Co-Founder, Anchorage Digital. “By combining the best of traditional finance with the best of crypto, we are expanding the horizon of what is possible for institutions in Bitcoin.”
Crypto lending has a full graveyard for a young industry. The collapse of the Terra stablecoin took out several firms including BlockFi, Celsius, Genesis Global Capital and Voyager. One company’s loss is another’s opportunity.
The failed firms were all startups, whereas Cantor Fitzgerald is far more established in terms of managing risk. It is one of just 25 primary dealers in the US Treasury markets. Its largest crypto client is stablecoin issuer Tether, for whom it manages Treasury collateral. It’s unclear whether the initial Bitcoin financing might be sourced from Tether or elsewhere.
