Jack Mallers’ Strike Ensures Bitcoin Collateral Safety

Jack Mallers has announced that Strike’s Bitcoin lending product will not rehypothecate Bitcoin collateral, addressing concerns after the collapses of Celsius and FTX.

This development in Strike’s offerings aims to restore trust in centralized Bitcoin lending while providing security to Bitcoin holders. The move is anticipated to attract wary investors.

Strike’s No-Rehypothecation Policy Boosts Trust

Jack Mallers, CEO of Strike, has reaffirmed that their Bitcoin lending product will not rehypothecate customer deposits. This declaration comes post several high-profile failures in the crypto lending space.

The decision follows the collapses of companies like FTX and Celsius, where rehypothecation led to significant losses. Mallers’ clear stance is intended to bolster trust among Bitcoin holders.

Positive Market Reaction to Strike’s Assurance

Many Bitcoin holders were disheartened by past lending platform failures. The assurance from Mallers has been positively received as it promises more secure lending options and mitigates counterparty risk.

Market analysts suggest this policy could lead to more Bitcoin being used as collateral, potentially stabilizing and increasing its perceived value in lending scenarios.

“Most importantly, Strike does not rehypothecate customer Bitcoin, meaning collateral is never reused for other purposes—a strong response to concerns after past industry failures.” — Jack Mallers, Founder & CEO, Strike

Addressing Past Rehypothecation Failures

The rehypothecation of Bitcoin previously led to cascading failures during a market downturn. Strike’s policy shift aims to provide a safer alternative to past lending practices.

Experts believe this shift could drive long-term changes in lending agreements, particularly enhancing risk management practices in the crypto sector.