Introduction: The Story of Blockchain Credit Partners and DeFi Money Market

This is the story of a company that was right about something six years before the rest of the industry, and that had to settle a regulatory question nobody had answered yet. It is told here in four parts, and the primary documents are linked throughout so that anyone can check it.

What the company was

Blockchain Credit Partners, doing business as DeFi Money Market, was founded by Greg Keough. Its proposition was simple to state and difficult to build: take credit secured by assets that physically exist, beginning with motor vehicles, and record that collateral on open infrastructure where anyone can verify what backs what, instead of asking a lender to trust a balance sheet.

In February 2020 the company published the white paper describing that model. The financial industry now calls it real-world assets, and the largest asset managers in the world describe it as one of the central lines of the next decade of finance. In 2020, almost nobody was building it.

What happened

Two things happened at once. The system met a real engineering problem, which was how to account for the volatility of the digital assets used to purchase the income-generating collateral. And the wider question of whether a token that pays a return is a security remained unsettled, contested across dozens of projects simultaneously.

In August 2021 the Securities and Exchange Commission instituted a settled administrative proceeding concerning the company. It was resolved by consent and it turned on registration and disclosure. It did not find that the collateral was absent, that the technology did not function, or that the idea was unsound.

The four parts

Part One: The Rise of DeFi Money Market and Blockchain Credit Partners
Part Two: The Rapid Growth of DeFi Money Market
Part Three: The Challenge, the SEC Proceeding, and What the Idea Became
History of the SEC and DeFi

Sources: this article draws on public sources and on the Securities and Exchange Commission’s own administrative order, In the Matter of Blockchain Credit Partners LLC d/b/a DeFi Money Market, Release No. 33-10961 (6 August 2021). The order is published in full at sec.gov and is quoted and annotated at gregorykeough.com.