As crypto collapses, a major lender quadruples borrowing costs
Brokers warn crypto market faces a reckoning with wrong-way risk as lenders rush to tighten terms
Cryptocurrency lender Celsius appears to have doubled its minimum collateral requirements and quadrupled the cost of borrowing via its platform, amid warnings that crypto lenders have for too long ignored the inherent wrong-way risk in allowing borrowers to lodge other coins as surety against default.
As of June 30, borrowers from Celsius are being offered a maximum loan-to-value (LTV) rate of 25% on a $25,000 loan at a 12% rate of interest, collateralised by a broad range of cryptocurrencies.
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