Moon Mortgage, a platform for lending cryptocurrencies, seems to be flourishing despite a bearish crypto market. The company has raised a $3.5 million seed round led by venture capital firms CoinFund and Cadenza Ventures. Each firm chipped in $1.65 million into the round, and the rest came from other investors.
Moon Mortgage says most of the seed round will be put toward growing CryptoMortgage, its crypto mortgage lending product. CryptoMortgage will allow investors to take loans for investment properties using their crypto assets as collateral. Moon Mortgage has opened a waitlist for the product, promising to launch soon in Colorado, Florida, and Texas, before rolling out to other U.S. states.
Crypto mortgage platforms are a fairly new phenomenon but an innovative one. They allow investors to take loans backed by their crypto assets to buy properties. This way, the buyer avoids selling their crypto assets to finance down payment and incurring significant taxes. They can also benefit from the upside of the crypto assets they deposit as collateral.
“People are already incentivized to use their crypto to invest in real estate; the problem is that until now they have never had the ability to,” Aaron Nevin, Moon Mortgage’s co-founder and CEO, said in a statement. “Historically, to buy a home they would have had to liquidate their assets, lose their upside, and get hit with a massive tax bill. The aim is to bridge the two worlds of crypto and TradFi to make it easy for them to leverage their digital assets.”
Moon Mortgage, founded in 2022, is one of several platforms providing crypto-backed mortgages to U.S. residents. Other notable rivals include Milo Credit, Ledn, and USDC.homes.
To keep users’ collateral deposits safe, Moon Mortgage has partnered with Anchorage Digital, a well-known crypto custodian firm and a federally chartered cryptocurrency bank. Anchorage became the first crypto bank to receive a charter from the American Office of the Comptroller of the Currency in January 2021.
With its $3.5 million seed round, Moon Mortgage has sufficient capital to launch its crypto mortgage product soon. The platform will accept collateral deposits in Bitcoin and Ethereum, according to its website.