Unchained-Capital Review – Strenghts and Weaknesses

The US American FinTech service is a financial management institution providing bitcoin supported financial services. Established in January 2016 by Dhruv Bansal and Joseph Kelly, the firm sole purpose is to decrease the risk usually related to full control of cryptoassets, facilitating its clients to enjoy a considerable amount of security and transparency.

Apart from providing high security for your Bitcoin (BTC) and Ethereum (ETH) unchained capital also renders loans and delivers vault for the cryptocurrency. The firm is situated in Austin, Texas, with 15 highly experienced engineers and entrepreneurs working to ensure services render meet standards of the cryptocurrency related FinTech industry.

Unchained Capital Financial Products

The firm’s main goal is to render collaborative asset management: safe vault and crypto-backed loans for your cryptocurrency assests. With the spotlight on transparency and wonderful client service Unchained Capital allows you to borrow U.S Dollar against your ether or bitcoin. Also, in order to attain the maximum security for your cryptocurrency, the firm provides multi-signature cold storage solutions.

Safe Vault For Bitcoin

The importance of the maximum security of your assets as they increase in value cannot be overemphasized. By using Unchained Capital multi-sig solutions you will be able to have control and improve your asset security. If you fall under the categories below, loans offered by this firm are appropriate for you:

Individuals who need to improve the security of their assets with multi-signature solutions.
A business that looks for a trusted partner through multi-sig account hierarchical access.
Joint vault accounts with the intention to share keys.

Both clients or institutions can control vaults provided by Unchained Capital. The service serves as a trusted co-signer or backup in a client-controlled solution, where users have 2 out of 3 private keys, and also retain their absolute control. Users can solely manage 1 of 3 private keys. With a trusted company acting as back up and Unchained servers as a co-signer, once you decide to choose a multi-institution solution where users can solely manage 1 of 3 private keys.

In comparison to hardware wallet only, using these services have numerous merits. The platform allows you to create a new key and move funds to a new vault in a rare scenario that one of your keys is compromised. The firm supports both Trezor and Ledger hardware wallets and doesn’t have access to users’ private keys. Multi-institution co-sign safety solution is the reason the biggest cryptocurrency exchanges in the world make use of the platform.

Loans Based on Cryptocurrency Collaterals

You can get up to $1,000,000 from the firm within the same business day after following all the three necessary steps.

• Apply for Loan: step one will be to fill a secure online form.
• Sign Contract: you will be able to apply and receive a loan after your application is approved
• Receive cash: you will be able to monitor your collateral with the unique address given to you by Unchained Capital during the course of your loan.

As a client, you can choose one of the predetermined loan plans

• 3-months
• 6-months
• 1-year
• 2-years
• 3-years

Unchained Capital’s policies are transparent and uncomplicated:

• Loan term: 3 – 60 months
• LTV (Loan-to-value) ratio: 35 – 50%
• Minimum amount (US american individuals only): $10,000
• Commercial minimum amount (international): $100,000

Unchained Capital Loan Benefits are

• Liberty – Ether or bitcoin is all you need to get money.
• Your loan will not be influenced by your credit score because it does not matter.

Either your Bitcoin (BTC) or Ether (ETH) cryptocurrency will be deposited to an address given by the company in order to serve as collateral if you default in your payment of the loan. You only need your loan to be approved to receive funds within one day, this is a great deal when you compare the services of traditional financial. However, it might take a while before funds get deposited to the bank account despite the fact funds have been transferred within 24 hours.

Steps To Follow To Get Loan From Unchained Capital

As part of KYC (Know Your Customer), financial institutions are mandated to ask for the below information. In order to receive loan customers must properly register their account.

During the verification process, the customers’ eligibility is properly checked. And it necessary that customers are a resident of one of the authorized states.

Below information must be provided:

• Name
• Birthday
• Social Security Number
• Business name, optional
• Email
• Physical address

Local restrictions make personal loans unavailable for the people in the state of Ohio, Alabama, Michigan, Idaho, Mississippi, Maryland, Missouri, Louisiana, Montana, Vermont, New York, South Carolina, Nevada, Washington North Dakota, and Tennessee. All the states that are not listed here are eligible.

Details of all directors, shareholders having more than 20% ownership, and officers must be provided for business loans. Except for New York, South Dakota, North Dakota, Vermont, Nevada, Alabama, and Tennessee Unchained Capital offered business loans to all the firms in other states.

During the time of registration for international loans whether you are eligible or not will be determined based on jurisdiction. However, $100,000 is the minimum amount offered by Unchained Capital only for commercial purposes.

Credit Score In Comparison To Unchained Capital

The loan received from the firm does not affect your credit score. Unchained Capital doesn’t perform a credit check and does not report any information to any credit bureau, but might carry out a soft pull like a list of your loans, payment history, and collection accounts.

What You Can Use As Collateral

Bitcoin and ether are the only acceptable crypto to secure loans from Unchained Capital even though it has thousands of cryptocurrencies.

Amount You Can Borrow

The amount to be borrowed depends on the loan type. You can borrow from $10,000 to $1,000,000 if it is domestic U.S based loans. For international loans $100,000 to $1,000,000 can be borrowed.

The Meaning of Loan-to-Value Ratio

The meaning of Loan-to-Value Ratio is the amount you want to use as the collateral will determine the amount of loan you can receive. Currently, a client gets 35-50% of the deposited ether or bitcoin and companies and individuals can apply for this loan. The value of cryptoassets is from the CME FC Real-Time index and uses data polled from the big cryptocurrency exchanges like CoinBase Pro, Bitstamp, Kraken, and itBit.

For instance, a U.S customer with an interest of receiving a loan allocates 10BTC for this purpose (with a price of $8,200 per BTC). The customer then goes ahead to fill a loan application and impends the required signature sealing the contract. He will receive $28,700 to $41,000 with a divided repayment plan ranging from 3 to 60 months.

Terms Of The Loan

Both ether or bitcoin repayment plan ranges from 3 to 60 months. The money is paid by depositing to the Unchained single- or multi-institution multi-signature cryptocurrency address. Although there are no charges for repayment fees, companies and individuals have to pay interests and principal. The repayment plan must be followed strictly by companies and individuals. The interest is paid monthly but there is a choice of paying the principal in several installments or once during the duration of the loan.
NOTE: Individuals and companies must respond swiftly when they receive margin calls by depositing or stand the probability of having their collateral liquidated.

Bitcoin Interest Rates On The Loan

There is no fixed interest. Interests depend on the loan amount, origination fees, and even state of residency. The loan – to – value ratio of 50% is what attracts interest rates and fees of cryptocurrency-based loans.

For instance, a client requests for $20,000 a loan for one year, at 10.50% interest rate, and a 1% origination fee. It will result in a monthly payment of $172.60, and a total of $2,071.20 during the 12 months. This customer must also meet the required payment of $20,000 and pay your interests. The principal can be paid in full or in installments, while interest must be paid every month.

Unchained Capital Security Measures

For Unchained vaults, the collateral deposited is stored either on a single- or a multi-institution multi-signature address, the customer has the sole ability to pick the preferred choice.

Cryptocurrency loans use only multi-institution for storage, multi-sig is a choosable option. Different parties share the collateral keys, the customer, Unchained Capital, and a trusted third party – here, Unchained works with a service called Citadel SPV. All three parties hold a single key, two out of the three keys are able to release funds.

The platform supports Ledger or Trezor hardware wallets which enable clients to manage their cryptoassets safely. However, you need to pay your loan and interest before the platform will allow you to withdraw the collateral.

Cryptocurrency based loans are new services, and the high volatility of the cryptocurrency market poises a high risk for a company to go bankrupt. Unchain Capital works with Citadel SPV – associated third party agent that co-signs transactions. This provides security and makes the customer fully aware when funds are about to be withdrawn.

Citadel SPV acts as a fail-safe: if at all the Unchained disappears or declares a state of bankruptcy, the funds will not be able to be withdrawn by the loan provider alone.

The nature of the service makes your capital uninsurable by any government-regulated institution.

However, the probability of the bankruptcy or disappearance of Unchained Capital is not very likely to happen due to the cryptocurrency pledge they get. Either way, if this happens, funds will be frozen, gone, or unable to be accessed.

In addition, due to the volatility of cryptocurrencies, when the price drops, unchained capital contacts customers by a margin call. This system ensures Unchained capital doesn’t go bankrupt.

The Effect of Bitcoin Price Fluctuation On The Loan

Unchained Capital has a system that caters for the volatility in prices of cryptocurrencies, ensuring that collateral is safe.

Effect Of Bitcoin Value Depreciation

In cases when there is a significant depreciation in value, Unchained Capital send emails notifying you of the current state of your collateral. This mail is a warning which serves as a margin call informing their client that the collateral is in danger of being liquidated. You will have to bring the loan-to-value ratio back to the original value, either by:

• Sending more collateral, or
• Paying off part of the principal in USD.

Effect Of Increase In Value Of Bitcoin

In cases when there is an increase in the principal ratio of about 250%, you can request a refund of deposited collateral. Unchained Capital will only honor requests with at least 30days, counting from the start of the loan and last margin call.

Unchained Capital Customer Support

By calling +1 (844) 486-2424 you can reach Unchained Capital to ask concerning any questions of their services during business regular hours. You can also reach them on hello@unchained-capital.com.

Merits And Demerits Of Services Rendered By Unchained Capital

The merits of cryptocurrency-backed loan when compared to traditional fiat loans are:

• You don’t need credit score check to secure a loan
• Within 24 hours you can get the loan
• Application is easy to fill
• It transparency enable you to monitor your assets
• With multi-sig, multi-institution cold wallets your asset security is guaranteed.

The demerits of unchained Capital are:

• It is location restricted because it is not supported by many states
• The minimum is high, for individual $10,000 and $100,000 for company loans
• Due to the volatility of cryptocurrency markets the possibility of margin call is quite high.

Unchained Capital And Taxes

There is no explicit guidance or law set by the IRS on how taxes should be paid on the crypto loan.
Cryptocurrency loans are considered similar to traditional lending. In traditional lending, your collateral (e.g. your home) is not subjected to capital gains since you don’t sell anything.

The same also can be said about tax-deductible payments. The IRS has no guidance laid out. The type of loan, whether an investment or for personal use, affects the tax to be paid. Also, the probability of you paying capital gain tax is quite high if you receive margin call which will liquidate your collateral.

Reason For Unavailability Of Unchained Capital Reviews

There is really no solid review for cryptocurrency and centralized loans due to the fact that it is just an emerging service. Also, Unchained Capital doesn’t publicize the information of its total value, which is contrary to DeFi Projects, its direct competition.

Go to unchained-capital.com