What if the cryptocurrency value of a crypto-secured loan drops?
September 22, 2024
The value of cryptocurrencies fluctuates, and if it tends to drop significantly, the borrower has the option to increase the value of the collateral to compensate for the drop. Should the value of the cryptocurrency decline to the point where the LTV reaches 90%, the exchange will notify the borrower that it has initiated the forced sale process and assigns the collateral to the provider, which is ACEMA Credit Czech. The latter then converts the cryptocurrency into euros and the investment is terminated early, with investors receiving 100% of their investment back including interest for the entire investment period.
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