Define "Rehypothecation" and Its Implications for Crypto Collateral ⎊ Path

Define “Rehypothecation” and Its Implications for Crypto Collateral.

Rehypothecation is the practice where a prime broker or custodian re-uses a client's posted collateral for their own purposes, such as lending it out or using it to cover their own margin requirements. While common in traditional finance, it is a significant risk in crypto, as it exposes the client's assets to the broker's own credit risk and can complicate recovery in the event of the broker's bankruptcy.

Explain the Difference between ‘Hypothecation’ and ‘Rehypothecation’

Explain the Concept of a ‘Rehypothecation’ Risk in Traditional Finance and How It Relates to Crypto Collateral

How Does the Risk of Rehypothecation Change for a Client with a Fully Paid-for Security versus One Held on Margin?

What Is ‘Rehypothecation’ and Why Is It a Concern When Using Certain Custodians or Prime Brokers?

What Is “Rehypothecation” and How Does It Relate to Custodian Risk?

How Does the Client Agreement Typically Address the Right of Rehypothecation?

How Does Collateral Management by a Prime Broker Mitigate Credit Risk?

What Is “Rehypothecation” of Collateral, and Why Is It Controversial?