Citi Flags Crypto-Backed Real Estate Mortgages Amid Falling Market Conditions
— Property, March, Certain threshold, Create, Investment gains, Utilize, Flags, Backed mortgage product, Estate, Adjacent mortgage product — 1 min read
Citi: "Crypto-adjacent mortgage product has gained prominence with a straightforward motivation: allowing crypto investors to utilize their investment gains to secure a loan without incurring the tax event" Figure Technologies unveiled some crypto-backed mortgage products in March with requirements for borrowers to put up 100% of collateral. Four months before that, crypto lending platform Ledn raised $70 million at a valuation of $540 million with plans to create a bitcoin-backed loan product. If the value of cryptocurrency declines, the borrower may be subject to margin calls and ultimately the cryptocurrency may be liquidated if the collateral value falls below a certain threshold, such as 35% of the property value, Citi added. If that happens, the lender may be forced to liquidate Source