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Caitlin Long @CaitlinLong_
, 5 tweets, 3 min read Read on Twitter
1/ Interesting response from @Bakkt today. For #bitcoin this is good news/bad news. First the good--Bakkt disclosed it's not using margin or leverage (explicitly). That's positive. But then the bad--it was silent about hidden leverage, which is subtle...…
2/ ...and insidious--namely, rehypothecation & commingling of collateral in the clearinghouse, rather than in an individual futures contract itself. Read about how commingling & rehypothecation happen here:…
3/ ...and, having negotiated collateral agreements as a pension fiduciary (& tried to get CCPs to agree not to commingle or rehypothecate collateral), this is where the devil is truly in the details. A standard collateral agreement is here (see para 6c):…
4/ ...I look forward to reviewing all of @Bakkt's legal documents when they're made public (including the warehouse custody agreement, collateral agreements of ICE Clearing US & intraday variation margin posting requirements) to determine degree...
5/ which @Bakkt creates fractionally-reserved claims on #bitcoin. Plus, Bakkt didn't answer questions abt how will it handle forks--lots of questions posed on that including by @aantonop. I look forward to reading the complete disclosure package when it's available! Thanks!
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