Questions and Answers
Security, Custody, and Collateral Management
What happens to my Bitcoin when I use it as collateral?
Your collateral is locked in a dedicated escrow account or multisig address, for example under a joint custody structure. The cryptocurrency remains isolated on-chain and is used only to secure your loan. No third party, including the platform itself, can move or use your funds for its own purposes unless strictly defined agreement conditions occur.
Does the platform rehypothecate my assets?
No. All collateral is stored 1:1 in segregated addresses. The platform does not rehypothecate, trade, or invest your collateral on third-party venues. You can check the status and balance of your collateral on-chain in real time.
What happens to my collateral if the platform faces technical or legal difficulties?
The safety of your assets does not depend on day-to-day platform operations. Because collateral is held in an independent smart contract or multisig structure, the return conditions are fixed. Even if the operating company shuts down or is liquidated, the borrower retains the right to receive collateral back after fulfilling the loan terms under the smart contract and legal agreement.
Financial Terms and Loan Parameters
Why take a BTC-backed loan instead of simply selling cryptocurrency?
Collateralized lending helps solve three key tasks:
- Keep investment upside: you retain exposure to Bitcoin price growth. If the market rises, the value of your base asset grows while it remains yours.
- Tax planning: receiving a loan is not a sale of the asset and usually does not create the same taxable event as selling cryptocurrency on an exchange. Tax treatment depends on jurisdiction and should be checked with advisers.
- Fast liquidity: you receive working capital for business needs, such as electricity payments or mining equipment, without exiting a long-term crypto position.
What collateral-to-loan ratio, or LTV, is required to open a credit line?
The Loan-to-Value ratio is generally between 50% and 80%. This provides a safety buffer against high cryptocurrency market volatility.
How is interest calculated and are there hidden fees?
Interest accrual is transparent and monthly: you pay a fixed or floating APR only for the actual time you use the borrowed funds. An origination fee may also be charged when the loan is created. The full cost of the loan is fixed in the agreement before collateral is sent.
Can I repay the loan early, and are there penalties?
Yes, the loan can be repaid early at any time. There are no penalties or hidden fees for early repayment: you pay interest only for the days you used the funds. Once full repayment is recorded, collateral is unlocked to your wallet.
Volatility Risk and Liquidation Procedure
What happens if the Bitcoin price drops sharply?
The platform continuously monitors collateral sufficiency. If collateral value falls and LTV approaches a critical level, for example 75-80%, the system sends a Margin Call notification. You receive a fixed time window to either partially repay principal or add more BTC to restore a safe LTV level.
When does forced collateral liquidation happen?
Forced liquidation, meaning the sale of part of the collateral to cover debt, is activated only if LTV reaches a critical threshold, for example 85-95%, and the borrower does not act after the Margin Call. Liquidation is performed only in the amount required to repay the loan and platform fees.
Partners and Agents
How does the platform partner program work?
Fundora offers a multi-level strategic partnership model for financial advisers, brokers, mining industry representatives, and crypto funds. Partners can set the rate for the end client. Monthly interest income from the client is distributed automatically among partners, including revenue from the subpartner network.
Does Fundora provide integration infrastructure for partners?
Yes. Large partners, web services, and automated platforms can use the API Sandbox and full technical documentation. You can integrate a loan calculator, application submission flow, or agent cabinets into your own interfaces and track conversions in real time.
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