PSA: Funds locked in the Earn program are NOT used for lending by CDC. Support verified. Please read.
Counter to what most here believe and tell others, CDC does not use customer's funds locked in Earn terms for lending. It does not leave the custody of CDC at all. Please read further for more clarification as well as screenshots from chat support verifying this information.
I came to learn this info after I was reviewing Gemini's Earn program T&Cs which can be found [here.](https://www.gemini.com/legal/gemini-earn-program-terms-and-authorization-agreement) The entire first half of this agreement outlines the risks associated with Gemini lending user funds through uncollateralized loans, how it leaves their custody and goes on to explain borrower credit risk and so forth. (Unchanged since day 1 and precisely why I do not use the service)
This made me curious about the wording of CDCs Earn program T&Cs so i re-read it. (Yes I've read it entirely before as should you when it's your money). It can be found [here.](https://crypto.com/document/crypto_earn) No where does it mention anything to do with lending, borrower credit risk, custody relinquishment etc. So I reached out to support for more info and clarification. [Here](https://imgur.com/a/uTS6IcS) are the screenshots of my chat.
When Coinbase and BlockFi's lending programs came under fire by the SEC, I know many users were curious what the future holds for CDCs Earn program. It is safe to say, there is no threat to the Earn program because it is not structured the same way as its competitors. I was curious about this after CEO Kris Marszalek was asked about the Coinbase situation in an interview following the PSG partnership. The interview can be seen [here.](https://www.youtube.com/watch?v=DxExmHYEiX8) He simply states that the program differs from Coinbase but does not go into detail.
However, this still begs the question and leads to speculation as to how CDC actually generates our interest. Assumptions and speculation can be dangerous, so tread carefully when jumping to conclusions. They do not need to disc...