Technology provider TechFinancials has committed $400,000 in an unsecured loan to Saar Levi and a new group of companies called CEDEX.com. The venture is developing a blockchain-based online diamond exchange in an attempt to make the traditional diamond industry into a tradeable asset class.
The loan will be used for to develop technology for the exchange platform. The provider of the loan will also share some know-how with the developer of the new solution.
The loan is interest-free and grants TechFinancials an option to acquire a 90 percent stake in a newly formed holding company called CEDEX HoldCo. The exercise of the option is at the discretion of TechFinancials. It is valid for three years from the date of the grant.
Aside from sharing some knowledge and expertise, TechFinancials may also provide technical development services to CEDEX. The agreement is based on a fee-for-service basis.
NEXT BLOCK SOFIA 2.0 + Fabulous Blockchain After-PartyGo to article >>
TechFinancials is taking the step in line with its strategic goals to broaden its portfolio of financial services technology solutions.
The online exchange business of physical diamonds has long been a source of controversy. With little to no effective means to monitor the completion of a transaction in existence, numerous fictitious diamonds sellers have built a bad name for online diamond purchasers.
The problem became particularly significant in the aftermath of the Great Financial Crisis when asset liquidation became a popular theme. Online fraudsters were quick to grasp the opportunity, masquerading as diamond dealers going out of business and selling their stock at big discounts.
Blockchain to the rescue
TechFinancials is entering the field with an investment into a new instrument that is eliminating the worries associated with online fraud. By using smart contracts, the execution of a diamond deal can only be completed upon receipt of the product, an approach that can be realised thanks to blockchain technology.
The website CEDEX.com is presently displaying a countdown clock. Few details are available for the public regarding the approach which the company will take to tackle consumer worries and deploy a wholly new product to the online diamond market.