24 April 2024
Company Name: Unchained
Founders: Joe Kelly and Dhruv Bansal
Date Founded: October 2016
Location of Headquarters: Austin, TX
Amount of Bitcoin in Treasury: Not disclosed
Number of Employees: 107
Website: https://unchained.com/
Public or Private? Private
Joe Kelly and Dhruv Bansal started Unchained with one main objective: to provide financial services to people like themselves — long-term bitcoin holders. Since 2017, when Unchained launched its first product, a lending desk that allowed customers to borrow US dollars against their bitcoin, the company has developed into a full-on financial services company for Bitcoiners who value holding their private keys.
Unchained now offers a suite of services and products, including multsig vaults for both individuals and businesses, a bitcoin trading desk, a bitcoin IRA and inheritance planning for bitcoin. Where Unchained really shines, though, is not just in how it helps clients safely secure their bitcoin, but in how it guides them through the process of doing so. It has a Concierge Onboarding team that walks clients through the often vulnerable process of setting up a multisig vault.
“We really like being a navigator,” Kelly told Bitcoin Magazine. “We’re not authoritative, like ‘You should do that.’ We’re the guide. We’re here to help show you ‘Here’s a map. Here’s a couple of trails you could take up the mountain. Pick your way, and if you need somebody to be your sherpa up one of these trails, we’ll do that for you.’”
I sat down with Kelly to learn more about the philosophy that underpins Unchained’s approach, the company’s history and how it’s established itself as one of the most trusted financial service providers in the Bitcoin space.
A transcript of our conversation, edited for length and clarity, follows below.
Frank Corva: How did you and your co-founder Dhruv Bansal meet?
Joe Kelly: Craigslist. I was an undergraduate college dropout looking for my next opportunities, and Dhruv was in grad school. His department, the physics department, was looking for a new website. They posted the gig like, “Hey, come build a website.” I was like, “Maybe I want to start a web development firm.” So, I came in to meet him at the center for nonlinear dynamics, which is chaos theory. I told Dhruv I’d always been hyper curious about this field of study. That’s been an enduring part of our relationship, our shared curiosity about complexity science. We started building the company after that.
Corva: So, you’re an autodidact. Are you the type that will seek out mentors or do you just read everything you can find on a topic until you understand it thoroughly?
Kelly: It’s a mix. Like a lot of humans, I can just go with intuition versus deriving knowledge from a book. I wish I’d had more mentors. Over the last decade plus, I’ve been thrown into the deep end of being a CEO. I’ve had to learn a lot on the job.
Corva: What have been some of the hurdles that you’ve surmounted with Unchained since you founded it in 2016?
Kelly: One of the things that excited me most with Unchained early was that it felt like a very contrarian bet in a couple ways. Back in 2016, all the VC funding was about “We’re not sure about this Bitcoin thing, but blockchain is the real technology.”
But Dhruv and I looked at people like us that held bitcoin for the long term and felt that we were the customer we wanted to serve: the long-term bitcoin holder had sort of no financial services advocate for them, no trusted institution that worked with them in a healthy way.
Then it was feedback like, “Well, what about these other coins? Or why don’t you lend out the bitcoin like BlockFi is doing and increase your revenues?” Saying no to those things was also contrarian. Principally, we said, “No, Bitcoin. Bitcoin is it. Bitcoin is enough.” The idea of lending out bitcoin was popular, but I’m really grateful we didn’t do that. Otherwise, we would have risked our fate like everyone else.
We were willing to be unpopular, stand alone and be underfunded compared to competitors for a lot of our early history. That changed, thankfully, with partnerships like NYDIG, who led our series A in 2021. That put us more on the map of having money, having resources and looking like we knew all along that we were going to be right.
Corva: So, is the long-term bitcoin holder the typical Unchained user?
Kelly: Yeah, that core sweet spot is that the individual long-term bitcoin holder who gravitates to self-custody because they’re already doing it or wants to work with somebody that helps them feel comfortable doing it.
Now, some of our core sweet spots are those people’s businesses or their trusts. Unchained is one of the few places that enables you to onboard a trust while you can still hold your keys. It’s not like you give them up to some third-party custodian to get those benefits.
Corva: Which products are currently your most popular?
Kelly: Unchained Vault is the bread and butter product that most every client uses. 95% of all clients have a vault that’s either a personal or business account.
More than a third of our clients have IRAs with us now. That’s been one of our faster growing product lines over the last year or two.
Loans are taken by some percentage of clients, but not everyone.
Trading really couples well with a vault. Increasingly, a bigger portion of the client base uses our trading desk, as well.
Click the image to get $100 off Unchained IRA.
Corva: When I think of Unchained’s approach, the two words that come to mind are “security” and “service.” You have a concierge service to help onboard clients and I’ve heard you talk about how important security is when it comes to storing the bitcoin that clients lend to you. Did you know that security and service would be at the center of what you do since the beginning?
Kelly: Security was there at the foundation early on. And I was on the front lines answering customer inquiries in our first year or two. We had a culture of really taking care of clients as much as possible when our main product was lending.
As we launched the vault product in 2019, part of what unlocked that product for us was the Concierge Onboarding product, which brings clients through the process of initializing the hardware wallets and getting set up with the multisig vault. That interaction is led by someone on our team, which is a big trust building opportunity.
While someone is making a backup of their private key in a live session — off camera, of course — going through those really vulnerable, private steps of initializing [their multsig vault], they’ve got an Unchained representative on the other side coaching them through it, answering any questions and making them feel comfortable. So, yeah, I think you nailed it when you said that security and service come together at Unchained.
Corva: Do you find it harder to convince people to use Unchained now that the spot Bitcoin ETFs are live and more convenient investment vehicles?
Kelly: The ETF does a great job in growing overall awareness for Bitcoin, creating more legitimacy around the asset for those that might have been on the fence. We haven’t seen it cloud or affect our client onboarding funnel. That still runs at a full pace like it was pre-ETF and has even been accelerated since the ETFs launched earlier this year.
One of the most effective elements of our sales approach is the army of Bitcoiners out there that don’t work at Unchained but encourage everyone to practice self custody. People sometimes come to us because they feel the peer pressure of “Hey, you know, I’ve been going to Bitcoin meetups, and I know I need to get my base for self custody.”
Also, over the last two years, the median age of our clients has gone up. More members of the Boomer generation have been holding bitcoin. Maybe they’re two or three years into the space after buying in 2020-21 and like “Alright, now I’m ready to do this. I’ve been through the trough and some of the peak and I’m going to hold this for a decade or more. Let me finally get self custody figured out.”
Corva: It sounds like you’re quite in touch with what customers want. I’ve also read that you pay close attention to customer feedback and factor it into your approach at Unchained. Can you give an example of a product you’ve created based on customer feedback?
Kelly: One example is last year in Q4 we launched Sound Advisory, which is our Registered Investment Advisor affiliate. The thinking behind that came out of customers that would come in for a Concierge Onboarding and talk to one of our frontline people. One of the last questions they would ask was, “Do you know anybody that can give me financial advice for my bitcoin? I can’t talk to my traditional financial advisor, but I’m nearing retirement age and I’m thinking about when I might want to sell some bitcoin or whether I want to get a loan against my bitcoin.”
People want to think through those decisions practically. The awful reality for a lot of people is you can’t talk to your financial advisor, you’ve got to hide this part of your portfolio. They’re not going to be philosophically aligned with you. It’s really difficult when you don’t have that alignment with somebody who should be such a trusted advisor.
Corva: I know that feeling. What else have you learned from your customers over the years?
Kelly: Something we’ve seen at Unchained, having been around for eight years now, is how Bitcoin adoption happens in the wake of macro geopolitical events or things that wake people up like, “Hey, it’s not actually my money at the bank.”
Also, people learn from things like the Canadian trucker protest where they saw that you can lose access to your dollars if you believe in certain things.
Then we had the failures of SVB and First Republic last year.
What we’ve created at Unchained is really kind of an antifragile set of products and services that aligns with core tenets and the core philosophy of Bitcoin. That means that when a lot of those bad things happen, we see influxes of clients.
I’m immensely proud of what the team has done here in terms of helping thousands of people get into a really comfortable position with assets outside of the traditional financial system and outside of systems that [are prone to] centralized risks of seizure or control over their bitcoin.
Unchained has over 7,000 clients that secure over 90,000 bitcoin with 12,000 keys. In four years, maybe that’s 100,000 keys securing tens of billions of dollars worth of bitcoin.
I think that’ll be a really unique financial institution that couldn’t have existed before. And our goal is to do that profitably in a way where we’re around as long as possible but also that’s going to be a net good for society, the industry and ecosystem overall.
Corva: I give you an immense amount of credit for not underestimating the user. What you’re doing with Unchained is saying, “We’re going to give you the full Bitcoin experience.” At the same time, you’re a financial services company and can play the TradFi game. It’s great for people who are more familiar with traditional finance, but who want to understand bitcoin and what makes it different from traditional assets or investments.
Kelly: It’s a model and an attitude that’s in contrast to the classic Wall Street attitude, which looks for “How do I get your money over here so I can make more money?” There’s obviously a version of that’s not always just in the client’s interest.
We’re the [opposite]. We’re trying to do business transparently — literally transparently on the blockchain — and as a company.
Corva: It’s apparent that you’re playing a long game, because your clients are going to have this experience with Unchained that’s different from the experience they have with traditional financial institutions, and they’re going to tell their friends about Unchained.
Kelly: It goes back to your ETF question. You may buy some shares in the ETF as your first exposure to bitcoin, but you’re only partially converted at that point. The full conversion happens when you’ve taken your sacrament of sending bitcoin with a hardware wallet. That’s a key part of the journey.