Kraken Holds the Trigger for USBC's $30M Bitcoin Collateral

USBC has taken on an increased amount of debt through its Bitcoin-backed loan with Kraken-affiliated lender Payward Interactive. As of July 31, USBC had pledged 479 Bitcoin worth approximately $30.1 million as collateral for the $18 million loan.

The loan agreement includes a call ratio of 130%, which means that if the price of Bitcoin falls below a certain threshold, Kraken can issue a collateral-call notice requiring additional collateral or partial repayment within 24 hours.

However, at a 120% liquidation threshold, Payward Interactive has the sole discretion to liquidate the collateral immediately without notice. This can occur even if no call has been issued and the 24-hour response period remains open.