A new wave of high-risk crypto lending ventures is surging back into the spotlight, just three years after the 2022 digital asset crash triggered a cascade of defaults and bankruptcies across the industry. According to reporting from the Financial Times, startups like Divine Research are leading a fresh push into unsecured crypto lending, promising microfinance access to millions of underserved consumers — and reigniting concerns over the fragility of this volatile sector.
Divine Research, a San Francisco-based crypto lender, claims to have issued approximately 30,000 uncollateralised short-term loans since December 2024. It uses iris-scanning identity verification developed by Worldcoin — the crypto project founded by OpenAI CEO Sam Altman — to ensure defaulters can’t simply open new accounts.
“We’re loaning to average folks like high-school teachers, fruit vendors … basically anyone with access to the internet can get access to our funds,” Divine’s founder Diego Estevez told the Financial Times. He described the model as “microfinance on steroids.”
Divine offers loans under $1,000, paid out in Circle’s USDC stablecoin, mostly targeting consumers in inflation-stricken countries like Argentina. While borrowers often have no prior crypto experience, Estevez says that free tokens issued by Worldcoin can be partially reclaimed in the event of defaults. Divine reports an initial loan default rate of around 40 percent — a figure it offsets with interest rates between 20 and 30 percent.
This revival of crypto lending comes as renewed investor enthusiasm — spurred in part by former U.S. President Donald Trump’s pro-crypto stance — drives bitcoin prices to record highs. Institutions such as JPMorgan are reportedly exploring entry into the crypto lending space, marking a potential shift in Wall Street’s posture after years of caution.
Other players are also jumping into the unsecured lending space. Crypto startup 3Jane, which recently secured $5.2 million in seed funding from Paradigm (a former FTX backer), is issuing uncollateralised credit lines on Ethereum. While borrowers must show proof of assets or future cash flows, no collateral is required. 3Jane also sells defaulted loans to U.S. collections agencies and is developing AI agents designed to enforce debt covenants, promising lower lending rates in future iterations.
Meanwhile, protocols like Wildcat are catering to institutional crypto players by enabling highly customizable, undercollateralised credit facilities on Ethereum. Wildcat claims to have facilitated around $170 million in lending to date, joining established players like Clearpool and TrueFi in a niche but growing segment of the digital finance landscape.
Despite these developments, the memory of the 2022 collapse — which saw lenders like Celsius and Genesis implode — remains fresh. Celsius’s CEO Alex Mashinsky is now serving a 12-year prison sentence for fraud, while Genesis settled for $2 billion in a New York lawsuit without admitting wrongdoing.
Divine, which is funded by deposits from yield-hungry individuals, insists it has engineered a system where “providers will always make a profit,” according to Estevez. But critics argue that the anonymity, limited enforcement mechanisms, and lack of consumer protections inherent in blockchain lending still pose significant risks — especially for novice borrowers.
While unsecured loans currently represent a small portion of the broader crypto credit market, the resurgence of high-risk lending — and its dependence on technologies like biometric verification and AI — is being closely watched by regulators, investors, and veterans of the last crypto winter alike.
