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Crypto lending turns to Wall Street credit rules to win back institutional trust after 2022 collapse

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Maple lenders and Kraken affiliates fund a bankruptcy-remote SPV that issues USDC loans against BTC and ETH collateral held by Kraken Financial.

Celsius froze withdrawals in June 2022 before filing for Chapter 11 in July 2022, and Genesis froze redemptions after FTX's collapse and filed for bankruptcy in January 2023, owing approximately $3.4 billion to its 50 largest creditors.

Key facts

Summary

01 Maple and Kraken launched a warehouse-style USDC facility for BTC and ETH-backed lending, with senior capital and junior exposure. 02 The structure adds custody, servicing, and bankruptcy-remote protections that DeFi lending has lacked, aiming to attract institutional credit capital. 03 Its real test is whether the facility can handle sharp BTC or ETH drops without forced-liquidation spirals or legal and execution failures. BlockFi, Celsius, Genesis, and Voyager together accounted for 40% of the crypto lending market and 82% of CeFi lending at their peaks, per Galaxy data.

Read full article at CryptoSlate →

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