Could a 51% Attack on a Smaller Coin Trigger Margin Calls on a Larger, Interconnected Exchange?

Yes, it is possible. If the smaller coin is used as collateral for margin trading on an exchange, a successful 51% attack would likely cause its price to crash violently.

This sudden devaluation of the collateral would decrease the value of traders' margin accounts. If the account value drops below the maintenance margin requirement, the exchange will issue a margin call, forcing the trader to add more funds or sell their assets.

If this happens on a large enough scale, it could lead to a cascade of forced liquidations, potentially affecting the prices of larger assets like Bitcoin or Ethereum if they are sold off to cover the margin calls.