""Global rules on crypto capital requirements & proof of reserves remain in flux, with the US and UK refusing to implement Basel's proposed framework,""
""IOSCO is pushing regulators to hold crypto custody and lending to the standards of traditional finance, yet almost no institution has disclosed how bitcoin collateral is managed, whether it's rehypothecated, or what happens in a liquidation scenario.""
""If lenders do not have to disclose how they use client collateral, the clients become the leverage. We saw what happened when BlockFi, Celsius, and Voyager operated in the dark. The difference now is that the balance sheets are bigger.""
Ledn launched an Open Book Report exposing its bitcoin loan book, collateral levels, and aggregate loan-to-value ratios to increase reserves transparency. The report highlights a regulatory vacuum around rehypothecation practices and proof of reserves as traditional lenders enter the crypto space following the GENIUS Act. Global rules on crypto capital requirements and proof of reserves remain unsettled, with key jurisdictions not adopting Basel's proposed framework. IOSCO is urging regulators to apply traditional finance custody and lending standards, while most institutions have not disclosed bitcoin collateral management, creating systemic leverage risks.
Read at Bitcoin Magazine
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