APX
APEX RESOURCES INC.
stock CVE

Yesterday the OSC granted APX Inc exemptive relief for BTC and ETH backed loans. Which despite starting with “decision should not be viewed as precedent for other filers” does set precedent for other filers, as can be seen when NetCoins was approved for staking with even stronger this-is-not-a-precedent wording ("decision should not be viewed as precedent for other filers -- OSC staff unlikely to recommend audited financial statement relief to this filer or other filers in the future absent exceptional circumstances.") followed by 7 Canadian competitors all also getting cleared to provide staking within the following year!
APX likely does not have a direct customer base, as they are not a Cryptoasset Trading Platform (CTP). And in Canada CTPs are the gatekeepers of customers in the centralized-decentralized-finance space. That is not a problem though, because in Canada in particular the CTPs operate as middleware stitching together many crypto and finance related functions from a menagerie of business partners, giving their users safe and streamlined access to the various functions. While the big American CTPs build stuff in house and are highly vertically integrated, this is not the case of their Canadian counterparts. Canadian CTPs lack the size to do so, but have also enjoyed a more collaborative relationship with regulators than those in the US. This resulted in them being guided towards a less vertically integrated ecosystem, where different companies manage different functions and are stitched together for a front end, similar to how consumer access to stock markets work.
APX is already partnered with NetCoins in the US. NetCoins is also therefore likely to almost immediately launch the same product in Canada. Other Canadian CTPs will likely follow suit and release APX-integrated crypto backed loans (and not build their own for the reason previously outlined) onto their platforms in the next few years.
However, unlike with staking which is fully outsourced by Canadian CTPs, there are greater incentives for building crypto backed loans in house. Canadian CTPs make their money off their customers trading, and everything else is essentially just a cost centre, or something they break even on. CTPs and their staking providers both care more about acquiring market share and attracting customers to their platform than they do about making money off staking. The staking providers, because they have deep pockets, and the CTPs because they make their money off trading and all the other services are currently there to get customers in the door.
APX however neither has deep pockets, nor a separate primary source of revenue. So they offer what to me looks like pretty terrible terms. 13.99% interest, 50% loan-to-value ratio, with liquidation occurring if asset value drops to 55%, and terms of 3-60 months. My unsecured line of credit from a big bank which I never shopped around for a better deal on is Prime Rate+3.48%, which is 8.43% at the time of writing. It is 6.5% additional interest compared to unsecured.
So for a crypto-backed loan, I should: * Get 6.5% higher interest than an unsecured loan from a bank. * Remove BTC from its tax shelter and pay capital gains on the appreciation. * Trust APX/your CTP with custody of your BTC. * Risk my crypto getting liquidated in a downturn—dropping below 55% of peak value happens every cycle. * Lock my crypto in and cash out in 3-month increments, meaning no short-term borrowing and repayment or partial loan payoffs when the market gets shaky (though you can put up more collateral).
Even if the CTPs take no profit on this whitelisted service offering, it is not competitve or likely to drive platform signups. If this were to be built in house though, then the CTP could absorb risk and give termless loans and at least make this competitive with an unsecured line of credit. I would then be motivated as a consumer to use a CTP offering this, as I could at least have my line of credit expanded to equal some portion of my crypto holdings. If Shakepay gets their way, I could continue to hold it in my tax shelter too.
This precedent (sorry OSC) could hopefully beexpanded to have BTC backed housing loans, so that you can buy a home using BTC, without actually having to sell your investment.

Yesterday the OSC granted APX Inc exemptive relief for BTC and ETH backed loans. Which despite starting with “decision should not be viewed as precedent for other filers” does set precedent for other filers, as can be seen when NetCoins was approved for staking with even stronger this-is-not-a-precedent wording ("decision should not be viewed as precedent for other filers -- OSC staff unlikely to recommend audited financial statement relief to this filer or other filers in the future absent exceptional circumstances.") followed by 7 Canadian competitors all also getting cleared to provide staking within the following year!
APX likely does not have a direct customer base, as they are not a Cryptoasset Trading Platform (CTP). And in Canada CTPs are the gatekeepers of customers in the centralized-decentralized-finance space. That is not a problem though, because in Canada in particular the CTPs operate as middleware stitching together many crypto and finance related functions from a menagerie of business partners, giving their users safe and streamlined access to the various functions. While the big American CTPs build stuff in house and are highly vertically integrated, this is not the case of their Canadian counterparts. Canadian CTPs lack the size to do so, but have also enjoyed a more collaborative relationship with regulators than those in the US. This resulted in them being guided towards a less vertically integrated ecosystem, where different companies manage different functions and are stitched together for a front end, similar to how consumer access to stock markets work.
APX is already partnered with NetCoins in the US. NetCoins is also therefore likely to almost immediately launch the same product in Canada. Other Canadian CTPs will likely follow suit and release APX-integrated crypto backed loans (and not build their own for the reason previously outlined) onto their platforms in the next few years.
However, unlike with staking which is fully outsourced by Canadian CTPs, there are greater incentives for building crypto backed loans in house. Canadian CTPs make their money off their customers trading, and everything else is essentially just a cost centre, or something they break even on. CTPs and their staking providers both care more about acquiring market share and attracting customers to their platform than they do about making money off staking. The staking providers, because they have deep pockets, and the CTPs because they make their money off trading and all the other services are currently there to get customers in the door.
APX however neither has deep pockets, nor a separate primary source of revenue. So they offer what to me looks like pretty terrible terms. 13.99% interest, 50% loan-to-value ratio, with liquidation occurring if asset value drops to 55%, and terms of 3-60 months. My unsecured line of credit from a big bank which I never shopped around for a better deal on is Prime Rate+3.48%, which is 8.43% at the time of writing. It is 6.5% additional interest compared to unsecured.
So for a crypto-backed loan, I should: * Get 6.5% higher interest than an unsecured loan from a bank. * Remove BTC from its tax shelter and pay capital gains on the appreciation. * Trust APX/your CTP with custody of your BTC. * Risk my crypto getting liquidated in a downturn—dropping below 55% of peak value happens every cycle. * Lock my crypto in and cash out in 3-month increments, meaning no short-term borrowing and repayment or partial loan payoffs when the market gets shaky (though you can put up more collateral).
Even if the CTPs take no profit on this whitelisted service offering, it is not competitve or likely to drive platform signups. If this were to be built in house though, then the CTP could absorb risk and give termless loans and at least make this competitive with an unsecured line of credit. I would then be motivated as a consumer to use a CTP offering this, as I could at least have my line of credit expanded to equal some portion of my crypto holdings. If Shakepay gets their way, I could continue to hold it in my tax shelter too.
This precedent (sorry OSC) could hopefully beexpanded to have BTC backed housing loans, so that you can buy a home using BTC, without actually having to sell your investment.