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Is it Safe to Earn Interest on Your Bitcoin SV with the BSaV.io Platform?

At the recent Coingeek Conference, a company called BSaV.io sponsored a booth and offered 5.15% APY on your idle BSV. They also offered 0% APR loans using BSV as collateral. 

But when you visit the BSaV website - there's hardly any information. They don't say how they are able to pay interest on your money. There is no about page to say who the founders are, what their background is and why anyone should trust them with our BSV.

Even when you sign up for an account, their FAQ page leads to 'Not Found'.

Not a good look. 

Still, I was curious. Surely Coingeek doesn't just let anyone sponsor a booth or continue running adverts on their site. I found a contact email (help@bsav.io) and sent some questions. 

This post aims to share some of the answers I received. I've trialled earning interest on some of my BSV for two weeks now and have been happy with the service so far. 

*** DISCLAIMER: I am not BSaV. I do not represent them! Just sharing what I have researched in case it is useful to anyone here. Any errors are mine and not BSaV's. 

Who are BSaV?

The founders of BSaV are Dr Edgar White and Elizabeth White. It was incorporated in the UK as BSAV Holdings Ltd, company number 12912849. 

They presented as The White Company at the 2018 Coingeek conference, where they introduced a stablecoin, a debit card and their White Wallet. 

Since then however The White Company has shifted to being a private institutional exchange. They’ve taken down their public facing websites and I believe are rebranding their public facing services as BSaV. 

The other key people behind BSaV are Slavko Krstic, Stephane Kouakou and Mariusz Antonik. All of whom work at APIS Capital Management.

How do they pay me interest on my BSV?

Their service is very similar to the popular Celsius app. They work with some of the same institutional counterparties and custodians.https://medium.com/@aminerahal613/lessons-from-the-immigrant-hustle-dr-edgar-radjabli-4a46aabb3c02

BSaV have institutional clients who want to borrow BSV for varying reasons. It could be arbitrage, market making or shorting. My assumption is they charge institutions interest to borrow funds, then pay clients who deposit BSV a lower interest rate. The difference being their profit. 

What makes BSaV different from Celsius is that they plan to make BSV the central currency of the platform. They also pay a slightly higher interest of 5.15% instead of 4.51% as of 28/10/2020. 

Are they trustworthy?

Dr. Edgar White, who used to use the last name Radjabli, worked as a dentist until he was in a car accident that meant he could not practice clinically anymore. He switched careers to investment management and founded APIS Capital Management in 2016. There is an article where he shares more of his personal story.

I also found an interview where he talked about Loan Doctor, a company that helps healthcare professionals with their financing needs. They’ve helped 3,500 doctors in the US with over $650m in loans. 

I noticed the Loan Doctor interface was very similar to the BSaV interface. One of their services on Loan Doctor was offering clients 6% APY on their money. At APIS Capital Management they had a similar financial product. BSaV was simply another version of that same financial product they've been in the business of offering for a few years now. This looked like a good sign to me. 

Is my money safe on BSaV? 

BSaV haven’t integrated features like 2FA yet, but this is planned. They use custodians like Prime Trust and Kingdom Trust. I understand that these two custodians have insurance which covers them in case they get hacked. BSaV are working with the custodians so that those policies also apply to them incase BSaV gets hacked. So it's my understanding that there is no current insurance in place if BSaV gets hacked. There's also no cover for things like your own BSaV account getting hacked or the price of BSV going to zero. 

They do have automatic liquidation events to protect loaned out funds. They have a standard 50% LTV (Loan to Value) for collateral. Although they won't do this if they are lending to a fully creditworthy counterparty, like a US regulated Broker Dealer. As I understand all of their clients they lend to are institutions right now, with no retail traders that they lend to. 

Are there any issues with withdrawing my money? 

Withdrawals are said to take one month. Although in practice this is only for large BSV holdings because the BSV may still be lent out and will need to be called back. I tested a small withdrawal early on and it was processed within a day. 

They did say that the more they grow as a company, the shorter withdrawals will end up taking as they'll have more liquidity. 

Does the interest earned compound daily?


The interest is paid out daily, however it only compounds monthly. In practice, it's not a huge difference. Daily compounding gives an extra 0.01 BSV per year on 100 BSV deposit compared to monthly compounding. 

Do they ask for KYC?

As of right now, not for signing up and depositing small amounts. Although I believe they will ask for KYC if you deposit a large amount and then try to withdraw it later. 

Concluding Thoughts

I'm excited to see a company build what would probably be called a DeFi-esque product on BSV. They said they plan to over time have everything onchain and tokenised. So every time your funds get loaned out, a transaction is made onchain that you can verify. They're working with the Bayesian Group on this, although this will probably take some time to build out.

Overall I'm not sure given the counterparty risk of BSaV being hacked whether it is wise to have large sums deposited there in return for 5.15%. With time as I see continued updates and greater security measures I'll continue to reassess. 

But for now I'm happy to support a company building on BSV with small amounts earning interest. 

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Updates: There's no edit button so I haven't been able to change the main post. Thought it is important that for anyone choosing to deposit their BSV with BSaV that knowing their full history is important. I had mentioned Loan Doctor in the above article but had also come across a lawsuit filed against Loan Doctor, which is why I believe that company no longer operates. Please read the lawsuit yourself as part of your due diligence: https://files.consumerfinance.gov/f/documents/cfpb_loan-doctor_complaint_2020-07.pdf From my understanding it did look like they misrepresented themselves with how they advertised Loan Doctor, though they did return 100% of their client's money, including the interest they said they would pay. I have been using the service since I wrote the post. The actual rate is 5.11% rather than the 5.15% I stated in the post. Other competing businesses I've seen is Youhodler which pays out 4.5%. Celsius pay out only 2% now. There is also Voyager which pays out 3%. Besides adding email 2FA for added security, there has been no other updates to the site or service which is disappointing.
Nice writeup. It's Defi without the De part! Or am I misunderstanding that?
liam replied:
More or less. They have plans to have things all onchain in the future though. It’ll just be called Bitcoin Finance in the future I reckon.
Good article and very interesting trails on bsv lending experience!
liam replied:
Thank you!
If it was on any other crypto, I would say it's 110% fraud. Since it's on BSV, it's only 100% fraud. Unless it's some sort of weird promo to get people in, but any loans in crypto are unsustainable. It can only be done when price is stable in respect to goods you buy and your earnings. No other way.
liam replied:
I don’t believe they are a fraud. They issue loans to institutions who use it to make more money in arbitrage, hedging or shorting. I don’t know how much BSaV charge institutions, but if you know how to make more money on what you pay for it, there’s definitely a viable business model here.
dimadan replied:
Not enough clients for that. That's really up to maybe 10 clients, and those institutions can work directly with Coin Whales. That's easier and cheaper. Think about, would you take 10 BSV from me at 5% interest rate? In other words, would you take 10 BSV and give me back 11 in 2 years? Your answer might be yes only if you expect BSV price to stay the same (and that is normal bank business and will happen in 10+ years) or drop (and you just speculate, and if you expect BSV price to drop in the long run, well, then good luck). I don't see any other sustainable business model
liam replied:
You're confusing this with long-term loans I think. I absolutely would borrow 10 BSV at 5% APY if I felt like in the next days or weeks BSV price was going to drop a few %. Hell even on tiny moves a good trader could profit much more than 5% APY. As long as BSV continues being volatile, there should be demand for BSV loans. Shorting does not mean you think price will drop longterm. I can think BSV is going to drop 20% in the next week but long-term still believe it will go up 10x. There is also what founder of Celsius said in this interview about how if you want to arbitrage a price difference between Bitfinex and Huobi say, you need to hedge your risk as you complete that trade, so you need to borrow one or both of the pair you are trying to arb. https://youtube.com/watch?v=t3JTQEnslNU
Good write up, I wasn't even aware of these guys.
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snugg replied:
So trying this out now, made an account, FAQ page is still broken but whatever. Trying to deposit, I initiate a 1 BSV(the minimum amount required) deposit. There are 2 options, to deposit funds in BSV or BTC, I select BSV. It creates a row in the deposit section of my account, there is a button in the Actions column, I click it and it seems to be populating incorrectly. It says "Deposit Actions" , and below that "BSV Address null". So I've sent an email to
snugg replied:
woops, accidentally hit comment too soon. Anyways So I sent an email to help@bsav.io and await further instruction
snugg replied:
So tl;dr I haven't even been able to send them any money yet
snugg replied:
Initiated another deposit, this time of 0.25 BSV despite them saying a minimum of 1 BSV required. Encountering same issue as above.
snugg replied:
Received an email back. Apparently it takes up to 24 hours for your account to officially activate. I initiated ano
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snugg replied:
I initiated another deposit and successfully deposited 1 BSV. Now the waiting game begins. It also says I need to give 1 month notice for withdrawing, so I will probably not be adding anymore funds to this anytime soon.
snugg replied:
BSAV has sent me an email expanding on their withdrawal times, and a look at their long term plans for the platform. I asked for and was given permission to share the email: "Thank you for letting us know and sharing your experience. By the way, in regards to the withdrawal period, we expect that to shorten to 24-48 hours for <10 BSV withdrawals, and up to 7 days for >10BSV withdrawals within the next month. The longer time frame that you are currently seeing is just to ensure that if someone deposited 100 BSV today, we would be able to lend it out appropriately to our institutional borrowers, who currently have fixed term loan needs of 1 month. As our client base grows, we will have more balanced demand between lend/borrow which will lead to the shorter timeframes described above. On the roadmap towards massive scale ($1 billion worth of BSV borrow/lending) we expect to achieve nearly instant withdrawals of any amount"
liam replied:
Thanks for sharing snugg! Good to know about the 24hrs thing to activate.
snugg tipped:
snugg replied:
Seems like the "Remember Me" function on login doesn't do much. Still have to relog back in after a few hours, retype in login info.
snugg replied:
After 4 days of interest accumulation, I'm at 0.0007 BSV interest gained on 1 BSV. I assume this, and subsequent interest, will be added to my 1 BSV balance when 1 month has passed. Currently it's in its own "Interest" section. I feel comfortable enough to deposit some more BSV as most of mine sits idle anyways. Still keeping it below 10 BSV.
liam replied:
Yes I assume that's what happens after the month too. I'm almost there so will see what happens.
snugg replied:
Been over a month now, interest is still accumulating, but it has not been added to my balance yet
liam replied:
Yeah neither has mine. I'll have to email to ask whether they do this automatically in terms of calculating compounding interest.
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morebigfish replied:
Thanks for the informative article. Any clue if tax authorities look at these little micro - interest payments as taxable income? Or not until you exchange for $?
liam replied:
You’re welcome@morebigfish :-) Yes they would. You’d have to check your specific tax jurisdiction but generally they would count as taxable income. Though here in the UK we have a personal allowance and my payments havent gone beyond that. And yes if you sell the BSV and it has appreciated in value since you earned it you would be liable for CGT there too. Cost basis is price of BSV when you earned it. Some more info here for US folks: https://blockfi.com/tax-implications-of-blockfis-crypto-interest-account