Why Credit Unions Are Getting Into the Crypto Game

Pat Maio
Pat Maio has held various reporting and editorial management positions over the past 25 years, having specialized in business and government reporting. He has held reporting jobs with the San Diego Union-Tribune, Orange County Register, Dow Jones News and other newspapers in Ohio, West Virginia, Maryland and Washington, D.C.
Why Credit Unions Are Getting Into the Crypto Game

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It’s been a rollercoaster three months since Torrance-based Unify Federal Credit Union became the first credit union in the U.S. to begin offering its members the ability to trade Bitcoin.

In November, Unify, which holds $3.6 billion in assets, forged a partnership with New York-based Bitcoin trading platform NYDIG to provide its 286,000 members with access to the cryptocurrency. At the time, it seemed like as good a time as any for Unify to enter the crypto fray: Bitcoin was traded at all-time highs exceeding $60,000 and had a market capitalization of more than $1 trillion.

But no sooner did Unify unveil the new crypto offering than Bitcoin began a precipitous decline in value, plummeting down to near the $35,000 mark at its lowest point in January. (The token now trades at around $40,000.) Still, that doesn’t appear to have fazed Unify members’ appetites to get into the crypto game; after maxing out Unify’s initial 2,500-person Bitcoin trading waiting list, more than 6,000 of the credit union’s members are now using Unify’s crypto trading services.

Photo courtesy of Unify

Activity on the platform has slowly ramped up to around 5,500 trades per month, with more than $600,000 worth of Bitcoin transactions to date. With Unify charging a maximum of 2% on each trade no matter the size, it’s a whole new source of non-interest income for the credit union.

“Two months doesn’t necessarily make a trend, but it certainly does appear that our members are very interested in using their primary financial institution as their vehicle for exploring crypto,” Greg Glawson, Unify’s executive vice president and chief information officer, told dot.LA.

Glawson notes that, if anything, Bitcoin’s selloff has only heightened interest among members looking to “buy the dip.”

“The interesting thing is, at the beginning when Bitcoin was [trading] very high, there were fewer transactions at higher dollar amounts,” he said. “But now, there are more transactions at lower amounts.”

Other credit unions are looking to follow the trail blazed by Unify. Idaho Central Credit Union, the largest credit union in its state, also teamed with NYDIG on Bitcoin trading services that launched earlier this month, while more financial institutions nationally are gathering on the sidelines, according to Credit Union National Association (CUNA) spokesperson Lauren Williams.

The volatile world of crypto trading would appear to be uncharacteristic territory for credit unions. As member-owned nonprofit financial institutions, they’ve long held a reputation as being more stable, conservative and trustworthy than commercial banks. But as more credit unions move into the space, it’s a sign of both crypto’s growing mainstream acceptance and the credit union industry’s search for new income growth opportunities.

Glawson said Unify’s venture into crypto is about “bring[ing] the best offerings to our members” amid rising public interest in digital assets. He added that the credit union has looked to ensure that its members know what they’re getting into.

“We want to make sure that member education is at the forefront when entering the cryptocurrency space,” he said. “We want to ensure that our membership is aware of what cryptocurrency is, what it isn’t and certainly that there is volatility in the area.”

The credit union industry as a whole, meanwhile, has argued that its move into digital assets would provide consumers with more protections at a time when federal regulators are increasingly eyeing the crypto sector.

“Our fear is that cryptocurrency and blockchain based financial platforms are creating an unregulated financial sector that could have major repercussions to the U.S. economy,” CUNA, which represents more than 5,000 credit unions nationally, wrote in a November letter to Congress’ Joint Economic Committee. It added that “Congress should look for ways to enable credit unions and other financial institutions to provide digital asset-related services, so that these services can be properly overseen by regulators.”

Meanwhile, the National Credit Union Administration, the federal regulatory body overseeing the industry, is currently “examining issues related to the benefits, risks, and regulatory treatment of decentralized finance products and cryptocurrencies,” according to NCUA spokesman Joseph Adamoli.

“While the NCUA recognizes the potential opportunities these products and technologies offer, we also recognize the potential risks they pose to credit union members, the credit union system and the broader financial services sector,” Adamoli said in an email to dot.LA.

In the meantime, Unify and a handful of other credit unions are moving forward with their plans. Unify is now exploring expanding its crypto trading platform beyond just Bitcoin; additionally, it’s weighting the possibility of paying out members’ dividends in Bitcoin, offering credit card rewards in crypto and permitting members to borrow against their crypto holdings.

“It comes down to Unify’s leadership recognizing that cryptocurrency is here to stay and a market force,” Glawson said. “We know that it’s something our members are highly interested in.”

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Genies Wants To Help Creators Build ‘Avatar Ecosystems’

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”

The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.

Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.

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Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

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PCH Driven: Director Jason Wise Talks Wine, Documentaries, and His New Indie Streaming Service SOMMTV

Jamie Williams
­Jamie Williams is the host of the “PCH Driven” podcast, a show about Southern California entrepreneurs, innovators and its driven leaders on their road to success. The series celebrates and reveals the wonders of the human spirit and explores the motivations behind what drives us.
Jason Wise holding wine glass
Image courtesy of Jason Wise

Jason Wise may still consider himself a little kid, but the 33-year-old filmmaker is building an IMDB page that rivals colleagues twice his age.

As the director behind SOMM, SOMM2, SOMM3, and the upcoming SOMM4, Wise has made a career producing award-winning documentary films that peer deep into the wine industry in Southern California and around the world.

On this episode of the PCH Driven podcast, he talks about life growing up in Cleveland as a horrible student, filmmaking, Los Angeles and his latest entrepreneurial endeavor: A streaming service called SOMMTV that features–what else?–documentaries about wine.

The conversation covers some serious ground, but the themes of wine and film work to anchor the discussion, and Wise dispenses bits of sage filmmaking advice.

“With a documentary you can just start filming right now,” he says. “That’s how SOMM came about. I got tossed into that world during the frustration of trying to make a different film, and I just started filming it, because no one could stop me because I was paying for it myself. That’s the thing with docs,” or “The good thing about SOMM is that you can explain it in one sentence: ‘The hardest test in the world is about wine, and you’ve never heard about it.’”

…Or at least maybe you hadn’t before he made his first film. Now with three SOMM documentaries under his belt, Wise is nearing completion of “SOMM4: Cup of Salvation,” which examines the history of wine’s relationship with religion. Wise says it’s “a wild film,” that spans multiple countries, the Vatican and even an active warzone. As he puts it, the idea is to show that “wine is about every subject,” rather than “every subject is about wine.”

For Wise, the transition to launching his own streaming service came out of his frustration with existing platforms holding too much power over the value of the content he produces.

“Do we want Netflix to tell us what our projects are worth or do we want the audience to do that?” he asks.

But unlike giants in the space, SOMMTV has adopted a gradual approach of just adding small bits of content as they develop. Without the need to license 500 or 1,000 hours of programming, Wise has been able to basically bootstrap SOMMTV and provide short form content and other more experimental offerings that typically get passed over by the Hulus and Disneys of the world.

So far, he says, the experiment is working, and now Wise is looking to raise some serious capital to keep up with the voracious appetites of his subscribers.

“Send those VCs my way,” Wise jokes.

Subscribe to PCH Driven on Apple, Stitcher, Spotify, iHeart, Google or wherever you get your podcasts.

dot.LA reporter David Shultz contributed to this report.