- Crypto lender Goldfinch has parted ways with a risk management adviser.
- The adviser, who was slated to earn $135,000 over six months, recently stopped responding to lender inquiries.
Crypto lender Goldfinch is seeking a new adviser after its previous hire — who was scheduled to make $135,000 over his six-month tenure — was seen by some restive lenders as ghosting them.
“Even the adviser defaulted on us,” one user in Goldfinch’s Discord — a messaging app — wrote Friday, summarising lenders’ feeling that the embattled startup has struggled to get its borrowers to honour the terms of their loans.
“This is more a case of us wanting to find a better adviser,” Goldfinch co-founder Blake West replied, according to messages viewed by DL News.
Goldfinch did not return DL News’ request for comment Monday.
It’s the latest setback for a leader in the multibillion-dollar real-world asset market.
The protocol is used to connect lenders and small businesses seeking capital, many of them based in developing countries.
One of the leading protocols at the intersection of crypto and private credit, Goldfinch has issued more than $60 million in outstanding loans since its launch in 2021.
But that figure has fallen steadily since early 2023, according to data from RWA.xyz, and Goldfinch has lost market share to rivals like Figure and Maple amid the seemingly insatiable demand for private credit.
The total value of active, crypto-based private credit loans was more than $9.1 billion on Monday, a roughly 44% increase since January.
Goldfinch has been rocked by a succession of defaults, and frustrated lenders have pressured parent company Warbler Labs to recoup as much as it can.
To that end, the company hired risk management adviser Ajay Gill in June with near-unanimous approval from investors who hold the Goldfinch governance token, GFI.
“Mr. Gill is currently advising the special situations team at one of the largest alternative investment firms in the world,” the May 20 proposal reads. According to his LinkedIn account, Gill is a managing partner at Discovery Global LLC.
Gill was charged with serving as the point of contact for Goldfinch lenders and delinquent borrowers, among other things.
But his weekly updates, shared in the Goldfinch Discord channel, abruptly stopped on October 2.
“What is going on here?! Advisor unresponsive and not providing any updates,” one frustrated user wrote on Discord.
Gill did not return DL News’ request for comment Monday.
Goldfinch Foundation head Obinna Okwodu said Friday he would temporarily assume Gill’s responsibilities during the search for Gill’s successor.
“Ajay will no longer be working as a consultant to the Goldfinch community,” he wrote. “In the meantime, I’ll be stepping in to oversee the management of the portfolio.”
That portfolio has struggled amid the difficult realities of lending to small and medium-sized businesses in the developing world.
In June 2023, African motorbike finance company Tugende Kenya became the first Goldfinch borrower to default when it missed a payment on a $5 million USDC loan.
Tugende Kenya helps motorcycle taxi operators in East Africa obtain financing to purchase their own bikes, rather than renting them indefinitely.
Warbler Labs accused the company of making an unauthorised loan to its struggling Uganda-based parent company.
In October 2023, Warbler said it would write off part of a $20 million loan to US credit fund Stratos, take on the full risk and responsibility of recovery, and backstop losses for Goldfinch users.
In April this year, Warbler Labs said a third borrower, Lend East, would be able to repay only $4.25 million of a $10.2 million loan.
Despite the defaults, Goldfinch has also facilitated 14 loans that were fully repaid, according to its website. Another seven are listed as “on time.”
Aleks Gilbert is a New York-based DeFi correspondent for DL News. You can reach him at aleks@dlnews.com.
