Discover and read the best of Twitter Threads about #rehypothecate
Most recents (3)
1/ SO MANY TRUTH BOMBS in this terrific blog post.🧐MUST READ for US customers of #crypto exchanges/custodians (hint:😱, if yours goes bankrupt). Note @AdamLevitin analysis applies US-wide *EXCEPT* in #Wyoming bc it mostly fixed the very issues he lays out creditslips.org/creditslips/20…
2/ Truth bomb #1: "I do not think customers understand the legal nature of the custodial relationships, and exchanges have no incentive to make the legal treatment clear to customers." ...
3/ "In bankruptcy, it is likely to be treated as a debtor-creditor relationship, not a custodial (#bailment) relationship. That means that customers are taking on REAL CREDIT RISK with the exchanges, which is a particular problem because of the opacity of the exchanges..."🎯
@decentralistdan @Esmussein @jchervinsky @bpforster24 @BlockFiZac @haydenzadams @delitzer @msantoriESQ 1/ Yep, for civil fraud consent may be a defense (Were risks truly disclosed? Was the consent informed? K of adhesion? etc), but it’s far from clear consent is a defense to crim fraud. Statutes focus on intent to derogate a lender’s security interest, not whether lender gave...
@decentralistdan @Esmussein @jchervinsky @bpforster24 @BlockFiZac @haydenzadams @delitzer @msantoriESQ 2/ ...consent. Process for lender granting a derogation of its security interest is v clear in state law—the lender affirmatively acts by releasing/amending the lien. If lender isn’t releasing & its security interest is diluted to 33% secured, for ex, could dist atty prosecute???
@decentralistdan @Esmussein @jchervinsky @bpforster24 @BlockFiZac @haydenzadams @delitzer @msantoriESQ 3/ A related & v interesting ? is why the securities industry can #rehypothecate w/o prosecution under these statutes. Perhaps an enterprising dist atty/AG hasn’t found the issue yet. More likely, it’s bc UCC Art 8 (enacted in 1994) allows securities intermediaries to sell/...
1/ TWEETSTORM about #Wyoming’s BIG REVEAL. This is long & info-packed, so buckle in. My native state is about to do bigger things for #blockchain, & the sector is about to pay Wyoming back big-time. Win-win! @Tyler_Lindholm @SenatorDriskill @TraceMayer @ForbesCrypto 
3/ New bill 2 parts. 1-Digital asset custody via #SEC #CustodyRule wld create first true #QualifiedCustodian for digital assets (for investors who by law can’t self-custody). 2-Defines property rights for digital assets—doing something HUGELY IMPT for #bitcoin/virtual currencies
