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The Challenges Of Bitcoin Financing

Law360, New York (January 18, 2018, 11:27 AM EST) -- As the price of bitcoin continues to rise, so too does the demand for financing secured by bitcoin.[1] This demand for secured financing often comes from holders of bitcoin seeking to monetize unrealized gains without incurring tax liability.[2] Others seek to magnify investment returns by establishing positions in bitcoin with borrowed money.

Whatever the motivations, lenders need to take appropriate steps to ensure they can realize on the collateral if their borrower does not repay the loan. Moreover, lenders need to ensure they are complying with...
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