Kontigo is gaining traction by promoting a stablecoin-first banking model as a global alternative to traditional financial services.

At the same time, its rapid rise has prompted skepticism within the crypto community. The model has raised questions over whether it can scale sustainably without repeating the missteps that have defined past industry failures.

Kontigo’s Rapid Rise Draws Attention

A new bank building its entire identity around stablecoins is rapidly climbing the ranks of the financial services industry.

Kontigo positions itself as a stable-currency platform offering self-custodial wallet services that allow users to store value in Bitcoin and spend in local stablecoins, with all transactions recorded on the blockchain.

On Tuesday, Kontigo CEO Jesus Castillo announced that the company had raised $20 million in a seed funding round to pursue its ambition of building the world’s largest bank. 

We just raised a $20M seed round to build the largest bank in the world.

Kontigo crossed $30M in annual revenue, $1B in payment volume, and 1M users in under 12 months, with a team of six engineers and one designer.

We are the fastest-growing stablecoin neobank in the world.… pic.twitter.com/pOmQ6gSy2H

— Jesus A. Castillo F. (@jecastillof) December 16, 2025

Castillo also described Kontigo as the fastest-growing stablecoin neobank globally. He said the platform allows individuals and businesses to earn a 10% yield on digital dollars, use a stablecoin-linked card with Bitcoin cashback, and invest in tokenized US stocks, among other features.

The leadership team says Kontigo aims to expand access to basic financial services to nearly 5 billion people worldwide. Prominent institutional investors, including Base and Coinbase Ventures, back the company.

Despite gaining significant traction almost immediately, Kontigo has also faced skepticism. Some observers questioned whether it represents a familiar crypto narrative, one that has previously generated catastrophic consequences for the broader market.

No-KYC Access Triggers Warning Signs

Among the various benefits Kontigo has highlighted, the company has emphasized that users from anywhere in the world can open an account and begin transacting in USDC or USDT without having to comply with Know Your Customer (KYC) requirements.

While this approach may appear less bureaucratic on the surface, it quickly raised concerns among users and industry observers. 

KYC rules are designed to protect financial institutions from bad actors. They require identity verification and confirmation of customer legitimacy.

Without such safeguards, both financial platforms and users face increased exposure to risks of fraud, money laundering, and terrorist financing.

Within the crypto industry, the absence of KYC standards has previously proven harmful for users relying on unprotected platforms.

A multinational stablecoin operation
Promising a fixed above-market yield
And access to tokenized stocks
With no KYC

Where have I seen all this before? pic.twitter.com/YAKiPpWH9B

— Zack Guzmán ♻️ (@zGuz) December 17, 2025

Last week, Terraform Labs co-founder Do Kwon was sentenced to 15 years in prison for orchestrating a $40 billion cryptocurrency fraud. Terra’s ecosystem operated without meaningful KYC controls, enabling vast sums of capital to enter the system anonymously and at scale.

When confidence in its algorithmic stablecoin unraveled, that absence of oversight intensified the run on the network, limited transparency around fund flows, and amplified losses for millions of users. The case underscored how the lack of basic safeguards can transform rapid expansion into systemic collapse.

The absence of KYC standards is not the only factor that has raised concerns about Kontigo’s mission.

Yield Promises Test User Confidence

Castillo clarified at one point that the 10% yield on USDC holdings comes from lending through DeFi protocol Morpho, exposure to US Treasury bills, and custody or yield-related services via Coinbase. 

Yet, critics said the numbers did not add up, raising concerns over the credibility of Kontigo’s advertised promises. Yields from these sources typically range between 3% and 7% annually, even when combined under current market conditions. 

be @kontigo_app a new Fintech

offer 10% yield on USDC

when asked where does it comes from lie saying is lending in Morpho + Tbills + Coinbase

math ain't mathing as those APRs are 5-7% short of 10%

Ignore people who point this shortage

any comments @jecastillof ? https://t.co/xegvZiODrg pic.twitter.com/blSKZLN7g7

— Cisco | CryptoAlert (@CiscoCANFT) December 17, 2025

Skeptics questioned how Kontigo can sustainably offer a 10% return. They pointed to the possibility of undisclosed risk, leverage, or opaque strategies.

Meanwhile, another user reported that a USDC transfer had not been credited to their wallet several hours after its initiation. 

For platforms that position themselves as banks or payment infrastructure, even short delays in fund availability can erode user confidence. Reliability and timely settlement are foundational expectations, regardless of transaction size.

As Kontigo scales, its long-term credibility will depend less on growth claims than on execution and earned user trust.

In a sector shaped by past failures, the company now faces mounting pressure to show that rapid expansion can be sustained without repeating the mistakes that have defined earlier crypto collapses.

The post Coinbase Ventures-Backed Stablecoin Bank Triggers Terra UST-Style Fears appeared first on BeInCrypto.

Bitcoin mining company Hut 8 announced on Wednesday an AI data center lease valued at $7 billion with cloud infrastructure provider Fluidstack. The move reinforced a growing trend among crypto miners to pivot toward AI infrastructure.

Following the announcement, Hut 8 shares surged, snapping a prolonged period of volatile stock performance and reflecting renewed investor interest.

Inside Hut 8’s Landmark AI Lease

The agreement covers 245 megawatts of AI computing capacity at Hut 8’s River Bend campus in Louisiana under a 15-year base lease.

It includes three optional five-year extensions, which could lift the total contract value to approximately $17.7 billion over its full term. The deal also gives infrastructure provider Fluidstack priority rights to lease up to an additional 1,000 megawatts as the campus expands.

At first glance, this $HUT deal looks like one of the strongest AI/HPC colocation deals disclosed so far:

🟠 ~$28–29M contract value per MW (high end of the peer set)
🟠 ~$1.85M guided NOI per MW-yr (peers typically disclosed ARR, not NOI)
🟠 15-yr base term + guidance to ~85%… https://t.co/eMa2Qoqnn7 pic.twitter.com/TgSPIR1rJ0

— matthew sigel, recovering CFA (@matthew_sigel) December 17, 2025

Beyond the initial lease, the agreement forms part of a broader collaboration between Hut 8 and AI developer Anthropic that could eventually scale to as much as 2.3 gigawatts of capacity.

Alphabet-owned Google is providing a financial backstop for the initial lease term, highlighting major cloud providers’ urgency to secure long-term power for energy-intensive AI workloads.

Hut 8 expects the project to generate roughly $6.9 billion in net operating income over the initial lease period.

Investors responded positively, with Hut 8 shares jumping about 20% in pre-market trading following the announcement. 

The move highlights the company’s efforts to stabilize its business, reflecting a broader trend among Bitcoin miners to pivot toward AI computing as a path to long-term relevance.

Bitcoin Mining Faces a Structural Reset

Throughout the year, Bitcoin mining has become a structurally more challenging business. Rising network difficulty, periodic surges in hash rate, higher energy costs, and the post-halving environment have steadily compressed margins.

As a result, many publicly listed miners that remained pure-play Bitcoin operators have struggled to deliver consistent earnings or a clear growth narrative. In response, an increasing number have moved to diversify their operations beyond mining alone.

At the same time, the rapid expansion of artificial intelligence has driven a sharp increase in demand for computing power. Because Bitcoin miners already control large-scale power access and industrial infrastructure, shifting toward AI data centers has emerged as a practical and increasingly necessary strategy.

Hut 8 has recognized this broader backdrop, particularly as its shares have struggled to find stability in recent weeks amid heightened volatility in Bitcoin prices.

The post Will Hut 8’s AI Pivot Reverse Its Stock Slump for Good? appeared first on BeInCrypto.