Blockchains are transparent—anyone can view what assets are held on the blockchain. Artificial intelligence (AI) provides the blockchain with an early warning system that allows cleansing of assets to avoid double and triple-pledging of assets as collateral—a common and typically undetected problem today in the private financial sector.
Serial fintech entrepreneur Cole Snell was so confident in today’s technologies that he took just six months to pilot test his newest venture, REAL Private Credit. “This is the first time I can say as a founder that I am not waiting for the technology to catch up to the problem. Our technology, including our proprietary AI, is the ‘Golden Key’ that is establishing a new industry seal of trust.”
REAL Private Credit has positioned itself as a thought leader on the modernization of financial law, including the recently adopted Article 12 of the Uniform Commercial Code, by advocating for strengthening asset securitization—to virtual perfection—through blockchain and AI. Asset originators are already pounding on the door for REAL Private Credit’s service that is revolutionizing the private credit sector by providing a real-time, auditable record of collateral control and lien priority, with tokenization used to ensure assets cannot be pledged more than once.
Snell says that the foundation of trust under which the current private credit industry operates has proven “deeply fragile and exclusionary.” REAL Private Credit’s core mission is to replace opaque trust with immutable truth by creating a secure, transparent pipeline that protects lenders from catastrophic losses.
The recent collapse in subprime auto lending and other high-profile bankruptcies demonstrate that the entire industry—from big banks to vulnerable borrowers—has been exposed to systemic failure.
Perhaps the most striking recent examples came from subprime auto lender Tricolor Holdings and auto parts manufacturer First Brands. Federal prosecutors alleged that, for at least seven years, CEO Daniel Chu and COO David Goodgame orchestrated a series of fraudulent schemes that let Tricolor obtain billions of dollars from lenders and investors by misrepresenting the value of its loan collateral.
The company sold used cars to customers with limited or poor credit and claimed more than a billion dollars in assets at the time it declared bankruptcy. Tricolor repeatedly pledged the same auto loans to multiple lenders at the same time, or “double-pledged” assets to banks, and manipulated loan data so that delinquent or charged-off loans appeared eligible for financing, according to the indictment.
When Tricolor and First Brands both went belly-up in the same month, JPMorgan CEO Jamie Dimon said these were signs that corporate lending practices throughout the industry had grown too lax over the past decade.
Their exposure ultimately forced major banks to take losses on their books and fear that more bad loans were lurking around the corner.
And no wonder. Under the leadership of now-resigned CEO Patrick James, First Brands bought and cobbled together aftermarket auto parts manufacturers, including Fram, Autolite, and Anco, through debt-financed deals, only to end up between $10 billion and $50 billion in debt against just $10 billion in assets. One of its lenders has speculated that First Brands was double pledging its invoices off-book to raise additional debt capital.
“These cases,” said Snell, “illustrate the devastating human cost of this industry’s failures. Large institutions have and will suffer massive losses.” People have and will lose their cars, their livelihoods, and their financial futures.
Snell founded REAL Private Credit on the principle that the democratization of private credit is essential for U.S. economic competitiveness. Legacy systems, financial jargon, and traditional gatekeeping have historically excluded average Americans, forcing credit-starved segments—like those with lower FICO scores or small business owners—into predatory financing arrangements.
But that need not be the case. Using an expansive proprietary dataset, Snell says REAL Private Credit has built a solution that can protect everyday Americans while securing the investments of major financial players against fraud.
REAL Private Credit’s pilot, which focused on identifying improper uses of collateral, has already detected multiple instances of double—even triple—pledging of the same assets within the general asset-backed lending (ABL) market. Its proprietary AI, combined with blockchain-level accountability, provides a single, immutable source of truth for asset ownership and security interest priority, thus materially reducing counterparty risk for commercial banks, warehouse lenders, and private credit firms.
REAL Private Credit is offering its platform to asset originators with the goal of driving down friction and creating efficiencies that enable capital in non-bank environments to flow safely and efficiently to where it is most needed. No longer will companies be able to use the same asset as security for two or three different loans—or sell the same asset-backed loan to multiple buyers.
Snell says results from the pilot program prove that REAL Private Credit’s AI-powered, blockchain-secured platform is not just a future concept—it is a necessary fix that is already solving the problems of decades-old infrastructure.
It is, says Snell, the solution to the systemic vulnerability that has long plagued the private credit industry.
Early results—with a shocking number of yellow flags and more red flags than Snell is comfortable with—demonstrate the urgency of replacing trust with truth.
“We are not waiting for future innovations. Our technology is already working to solve a massive, growing financial bubble,” says Snell.
“REAL Private Credit is committed to providing a transparent, regulated, and tech-first pipeline that drastically reduces fraud, protects institutions, and finally allows a wider range of Americans to access the vital financing they need to build their businesses and their lives.”
