What if the value of the cryptocurrency that is used for securing the loan decreases? │ Bondster

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What if the value of the cryptocurrency that is used for securing the loan decreases?

What if the value of the cryptocurrency that is used for securing the loan decreases?

December 26, 2021

The value of cryptocurrencies fluctuates and if it was to fall significantly, the borrower has the possibility to increase the value of the collateral and thus compensate for the decline. Should the value of cryptocurrency fall to the extent that the value of collateral reaches 90%, the exchange notifies the borrower of the commencement of a forced sale process and the assignment of the collateral to the lender, ACEMA. It then converts the cryptocurrency to euros and the investment ends prematurely with the investors receiving back 100% of their invested funds including interest for the whole period of the investment.


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