Clarity Crypto Financial is a firm that connects lenders to investors interesting in buying cryptocurrencies. Considering the volatility of cryptocurrency markets, this seems like a risky business model, but its statement that borrowers can access loans of up to $10 million suggests that this is no fly-by-night operation. The company may benefit some of its borrowers, but its lack of transparency about its management, embrace of volatility, and high interest rates should be seen as red flags.
Clarity Crypto Financial's Team
The only individual identified as responsible for Clarity Crypto Financial is Owen Lawrie, who appears to be in his early 20s in his picture on the company’s website. No biographical information is provided about Lawrie aside from a “Founding Story” where he describes how he wanted to invest in cryptocurrencies but lacked the funds, and was thus inspired to create a lending service for others in the same situation. Searching the internet for more information about Lawrie and Clarity Crypto Financial yielded no more information; the service does not appear to have a presence on social media, and has not been covered by any online publications.
Clarity Crypto Financial's Technology
Clarity Crypto Financial aggregates loan offers for investments in cryptocurrency or related industries. Users can submit their proposals, and promising applicants will likely be subject to closer scrutiny from the lending companies. No personal information is required to submit an application, but applicants that lenders are genuinely interested in may need to submit their credit score, credit history, and detailed plans for the funding.
The company doesn't clearly state any rules for what ideas would qualify for its loans; it seems that the loans are intended for borrowers interested in day trading or otherwise speculating with cryptocurrencies. The only statements about eligibility are that borrowers can use the funds to invest in any cryptocurrency, not just the most popular, and that both personal and business loans are available.
The company states that it guarantees the “lowest rates possible,” but the interest rates mentioned in its terms of service are rather high; they range from 4.99% to a maximum of 35.99%. Repayment periods range from 24 to 60 months. They offer an example of a typical loan of $20,000 for four years at an interest rate of 15.49% with a corresponding APR of 18.34%; this would require a monthly payment of just over $561, and would ultimately cost about $7,948 in interest. Cryptocurrencies have been strong enough investments that this has been sustainable for a stretch of time, but unless these trends continue, investors could find themselves in trouble.
The company states that loans of up to $10 million are available through its platform, but it's likely that these are only for the most promising ventures and would not be offered for speculative investment.
The Clarity Crypto Financial Verdict
Borrowing money to speculate with is not advisable, especially in markets as volatile as cryptocurrencies. Even when cryptocurrency markets were experiencing seemingly unstoppable growth in late 2017, it would have been unwise to borrow significant amounts of money to invest due to the sheer uncertainty. That Clarity Crypto Capital is offering loans for this purpose is alarming, and it will be interesting to see if the company proves a success. It's difficult to say whether the company's lending is explicitly predatory; some borrowers will surely do well with this unusual line of credit, but the interest rates are rather high and the company seems to encourage aggressive risk-taking more than measured responsibility.
Investors interested in a loan from Clarity Crypto Capital should be very careful to ensure that they have a backup plan to make their payments in the event that their cryptocurrency investments lose value. Borrowers should also note the lack of transparency that the company offers before sending them any personal information. Anyone seeking a loan should ensure that they have a solid plan to repay it, and be wary of predatory lending practices.