A resurgence of high-risk lending practices in the cryptocurrency sector is underway, as evidenced by the emergence of new startups like Divine Research in San Francisco. This revitalization comes just years after the industry faced significant turmoil, marked by widespread bankruptcies and defaults. According to a recent Financial Times report, these startups are venturing into risky lending models reminiscent of past failures, raising concerns about potential volatility in the crypto market. With tens of thousands of loans already issued, the appetite for high returns is evident among investors, albeit with accompanying risks. As the crypto landscape evolves, the implications of these lending practices warrant close scrutiny. Industry experts emphasize the need for caution and regulatory oversight to mitigate risks associated with such high-stakes financial maneuvers, underscoring the fragile nature of the crypto ecosystem in the wake of previous disruptions.
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