Kraken Affiliate Lends $18M, Threatens Liquidation if BTC Price Falls Below $45K

US-based crypto firm USBC has taken on $18 million in debt from Kraken's affiliate, Payward Interactive. This loan is secured by 479 Bitcoin, which is worth around $30.1 million at current prices. The agreement requires USBC to maintain a 150% margin ratio, but the company currently only has a 130% call ratio. If the price of Bitcoin drops below $48,851.77, Payward Interactive may issue a collateral-call notice, requiring USBC to add more collateral or make partial repayments within 24 hours.

If the price falls below $45,094, however, Kraken's affiliate has the right to liquidate the entire position immediately without notice. This is known as the 120% liquidation threshold. In such a scenario, USBC would owe any shortfall after proceeds are applied, while excess proceeds would be returned.

USBC reported that no collateral call or mandatory repayment had occurred as of July 31. The company has been using loan proceeds to develop its tokenized-deposit offering, which includes costs paid to affiliate Vast Holdings.