"We saw a real opportunity to have a conservative approach," Patel, who previously worked at Bridgewater and Brex, told Fortune. "We've seen tremendous demand."
During the bull market of 2021 and 2022, crypto lending was a booming business. Firms focused on both institutional and retail customers, accepting collateral in thinly traded assets and often lending that collateral out to other clients, a risky process called rehypothecation.
While crypto markets have come roaring back over the past year, new lenders haven't emerged to fill the void left by firms like Genesis and BlockFi. Patel and Sahay saw a lane for creating a lending outfit that would allow customers to deposit their crypto and receive dollar-denominated loans in exchange.
Arch, founded by finance veterans Dhruv Patel and Himanshu Sahay, announced on Thursday it raised a $5 million equity seed round for its crypto lending practice co-led by Morgan Creek Digital and Castle Island Ventures.
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