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@ Wonteet Zebugs
2025-05-21 12:44:55
I should have put hastags on this one, doing it here :
This post perfectly summarizes how I feel about bitcoin-backed loans : "Bitcoin Backed Loans - One Strike and You’re Out!" https://www.thebitcoinway.com/articles/bitcoin-backed-loans
Notably :
- Volatility and Liquidation Risks
- Counterparty Risks
- Regulatory Risks
- High Interest Rates and Collateral Requirements
- Rehypothecation Risks
- Tax Implications
And I would add another risk : "The Great Taking", by David Webb : https://thegreattaking.com/
For those who are interested in reading the legalese, take a look at what Webb explains about UCC section 8 : https://mpalmer.heresy.is/webnotes/TheGreatTaking/Security-Entitlement.html
and about Central Clearing Parties : https://mpalmer.heresy.is/webnotes/TheGreatTaking/Central-Clearing-Parties.html
Essentially, even if the bitcoin itself is not rehypothecated, the shares of the shareholders of the custodian could be swept up in a mass Great Taking. Ultimate rug-pull. A 5D-rug-pull.
#btc #bitcoin #loans #thegreattaking