Kraken Affiliate Holds Liquidation Switch on USBC Bitcoin Loan

Crypto firm USBC has ramped up its financial exposure by increasing its Bitcoin backed loan to $18 million. Recent regulatory filings show the company pledged 479 Bitcoin to secure the debt through a facility with Payward Interactive, an entity linked to Kraken. Another Kraken affiliate acts as the custodian holding the digital assets.

The loan agreement includes strict risk thresholds tied to the price of Bitcoin. If the market value drops to an illustrative $48,852, the lender can issue a collateral call requiring USBC to add funds or repay debt within 24 hours. A more severe drop to around $45,094 triggers an instant liquidation clause, allowing Kraken to sell the Bitcoin immediately without prior notice.

While Bitcoin currently trades well above these danger zones, the terms highlight the high stakes involved in crypto backed corporate debt. USBC reported using the funds to develop a tokenized deposit project, but traders are keeping a close eye on treasury debt levels as market volatility continues to test institutional lending structures.