In case you’re not clear about the risks of manual administration of private market ‘alternative’ investments – a smart contract could have saved Citibank from a $900m mistake earlier this week.
Citibank is administrating Revlon’s $1.8B loan from a syndicate of private investors. They (maybe) meant to send out the latest interest payment but wired $900m in error.
That’s not a typo – and Citibank is having to sue to get close to $400m of it back.
Payments like this can be fully automated in a smart contract based private credit agreement.
It seems that Citibank has almost a billion reasons to start thinking about a better way to do this.