While lenders may wish to accept crypto as collateral, they often lack the expertise or capability to actually hold it. The solution: Have BitGo manage the collateral as your triparty agent.BitGo Loan Servicing allows you to make crypto-backed loans by performing three, key functions on your behalf. Specifically, we:

  • Custody the assets in offline cold storage, so they’re safe from theft, loss, or misuse

  • Provide daily reporting

  • Handle margin calls and liquidations, as necessary

How loan servicing helps lenders

By making this type of agreement with borrowers, institutions can grow their loan book and potentially earn better terms on the deal. With BitGo Prime facilitating, you can:

  • Address operational and regulatory concerns. Bypass the normal challenges associated with holding crypto by relying on our expertise.

  • Ensure funds are held safely. BitGo serves as a qualified custodian, safeguarding the collateral in cold storage and holding up to $250M in insurance.

  • Simplify loan operations. BitGo handles margin calls, liquidations, and transfers, while providing daily reporting throughout the life of the loan.

Once set up, it’s also simple for lenders to scale this across multiple borrowers.One additional use case: For trading firms, BitGo can serve as your triparty, showing proof of funds when derivatives are posted as collateral.

How loan servicing helps borrowers

With BitGo Loan Servicing, borrowers get a better, safer experience.Normally, their collateral would be held by a counterparty who may not have the experience to keep their collateral safe.By entrusting their assets to BitGo as their custodian and triparty agent, borrowers can reduce counterparty risk, knowing their funds will be protected by a regulated entity.

How BitGo protects digital assets

The collateral we manage through BitGo Loan Servicing gets kept in our cold storage, meaning it’s held offline in a bank-grade vault. These funds are never commingled or rehypothecated, and can only be moved with appropriate authorization.This custody service is provided by one of our regulated trust companies, each of which serve as a “qualified custodian.” That means we:

  • Have a fiduciary duty to our clients

  • Hold client funds in segregated accounts

  • Meet rigorous regulatory standards and audits that help protect client funds against loss, theft, or misuse

BitGo also maintains $250M in insurance for wallets where we hold all the keys (as we do in cold storage).

How to get startedTo learn more about Loan Servicing, please contact sales@bitgo.com to start a conversation.

About BitGo

BitGo is the leading infrastructure provider of digital asset solutions, offering custody, wallets, staking, trading, financing and settlement out of regulated cold storage. Founded in 2013, BitGo is the first digital asset company to focus exclusively on serving institutional clients. BitGo is dedicated to advancing a digital financial services economy that is borderless and accessible 24/7. With multiple Trust companies around the world, BitGo is the preferred security and operational backbone for more than 1,500 institutional clients in 50 countries, including many of the world’s top brands, cryptocurrency exchanges and platforms. BitGo also secures approximately 20% of all on-chain Bitcoin transactions by value and is the largest independent digital asset custodian. For more information, please visit www.bitgo.com.

©2024 BitGo Inc. (collectively with its affiliates and subsidiaries, “BitGo”). All rights reserved. BitGo Trust Company, Inc., BitGo Inc., and BitGo Prime LLC are separately operated, wholly-owned subsidiaries of BitGo Holdings, Inc., a Delaware corporation headquartered in Palo Alto, CA. No legal, tax, investment, or other advice is provided by any BitGo entity. Please consult your legal/tax/investment professional for questions about your specific circumstances. Digital asset holdings involve a high degree of risk, and can fluctuate greatly on any given day. Accordingly, your digital asset holdings may be subject to large swings in value and may even become worthless. The information provided herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. BitGo is not directing this information to any person in any jurisdiction where the publication or availability of the information is prohibited, by reason of that person’s citizenship, residence or otherwise.