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Reference

Glossary of crypto loan and bitcoin OTC terms

Thirty-four terms, defined as lenders, desks, regulators and courts use them.
By Crypto Loans HQ Published Last reviewed

This glossary defines the terms used across Crypto Loans HQ: the loan mechanics that decide when a lender sells your collateral, the custody language that decides what happens if that lender fails, the vocabulary of a bitcoin OTC desk, and the compliance and tax terms you will meet on the way. Four are commonly confused with something else, and they are flagged.

Key takeaways

  • One number governs a loan. Loan-to-value decides the starting size, the margin call and the liquidation: in September 2026 lenders published margin calls between 65% and 85% LTV.
  • Custody words are not interchangeable. Segregated, bankruptcy-remote, qualified custodian and no rehypothecation each say something different; on 9 November 2023 the Celsius court held that collateral posted under terms allowing re-use was estate property.
  • Four terms are commonly confused with something else. A Lombard loan is not Lombard Finance, crypto lending here always means borrowing against crypto, a bitcoin OTC desk is not #bitcoin-otc, and rehypothecation is not hypothecation.
  • Tax turns on disposal. Borrowing is usually not one; a liquidation is, and whether posting collateral is depends on what the agreement lets the lender do.

General information, not advice. These definitions describe how the terms are used in this market, as read on 19 September 2026. They are not legal, tax or investment advice, not a statement of any lender’s or desk’s terms, and not an offer to lend or to arrange a loan. Firms are named only to describe what they publish. How we are paid.

Four terms that mean something else

Crypto loan and bitcoin OTC terms that are commonly confused
Term, as used here Not to be confused with
Crypto lending Lending crypto out to a platform in return for interest, which this site does not cover
Lombard loan Lombard Finance, a decentralized finance protocol, and its LBTC token
Bitcoin OTC desk #bitcoin-otc, an IRC marketplace that describes itself as an aggregator of supply and demand, not a broker or escrow
Rehypothecation Hypothecation, which is only the pledge itself, with no re-use by the lender
Sources for each distinction are linked below. Read every one of these terms in the document in front of you, not by reputation.

Loans and collateral

Loan-to-value (LTV)
The loan balance divided by the market value of the collateral, as a percentage: a US$500,000 loan against US$1,000,000 of bitcoin is 50%. Lenders set a starting level, a margin-call level and a liquidation level, and some count accrued interest in the balance.
Collateral-to-loan ratio
The same relationship inverted: collateral value divided by loan principal. Unchained measures loan health this way, as collateral-to-principal, so 200% is a 50% LTV, 150% is about 66.7% and 120% about 83.3%.
Margin call
A lender demand to restore the LTV after a price fall, met by adding collateral or repaying part of the loan. Levels lenders published in September 2026 ran between 65% (Xapo Bank's top-up demand) and 85% (Figure, on loans written at 75% initial LTV), and each lender sets its own.
Cure window
The time a lender allows to answer a margin call before it sells. Windows published in September 2026 were 24 hours at Arch and Unchained and 48 hours at Figure; several lenders publish none, and some liquidation levels carry no window at all.
Liquidation
The lender selling pledged collateral once the LTV reaches its liquidation level. It happens without your instruction, fixes the loss on the coins sold, and is generally a taxable disposal even though the proceeds go to the lender.
Partial liquidation
A sale of only enough collateral to bring the LTV back to a target, leaving the loan in place. The alternative is a sale large enough to repay the whole balance, with any remainder returned. The loan agreement says which applies.
Lombard loan
A loan secured on marketable assets held with a bank or broker, a private-banking term that some lenders now apply to crypto-collateralized lending. It has nothing to do with Lombard Finance, a decentralized finance protocol, or its LBTC token.
Crypto lending
Two different transactions share the name. On this site it always means borrowing cash or stablecoins against crypto you keep. It never means lending crypto out to a platform in return for interest, which is a separate business and outside our scope.
Securities-based lending
Borrowing against listed securities such as shares, bonds, fund units or spot bitcoin ETF shares. Securities margin rules govern it rather than crypto loan terms, and questions about it belong on securitiesbackedlending.com.

Custody and control

Rehypothecation
A lender re-using collateral you have pledged, by pledging it again to its own funder, lending it on, or selling it. The right exists only where the agreement creates it, and it decides whether you own coins or hold a claim if the lender fails.
Qualified custodian
A defined term in the United States, under the Securities and Exchange Commission custody rule for investment advisers: an insured bank, a registered broker-dealer, a registered futures commission merchant within limits, or a foreign institution that segregates client assets.
Segregated custody
Holding your collateral in an account identified as yours, apart from the firm's own assets and from other clients' assets. It is what keeps coins traceable in an insolvency; a commingled wallet does the opposite.
Multisig
A bitcoin address that needs signatures from more than one key before coins can move. Unchained's help pages state that it holds loan collateral in a 2-of-3 quorum shared between the borrower, Unchained and a key agent, so no single party can move it alone (Unchained, accessed September 2026).
Key agent
An independent third party holding one key in a multisig arrangement. Its role is to make collusion between two parties necessary before collateral can move, and to be able to sign with the borrower if the lender disappears.
Cold storage
Private keys kept on hardware that has never been connected to the internet. It describes how keys are protected, not who owns the coins or what the holder is allowed to do with them.
Proof of reserves
An attestation that a firm held assets matching a stated figure at a point in time. It covers one side of the balance sheet: it says nothing about liabilities, and it is not an audit.

Trading size with a bitcoin OTC desk

OTC desk
A firm that trades bitcoin with you bilaterally, quoting one price for the whole size instead of routing the order to an exchange book. A principal desk trades from its own account; an agency model passes your order to venues for a fee.
RFQ (request for quote)
You ask a bitcoin OTC desk for a price in a stated size and it returns a quote to accept or decline. Coinbase Prime lists RFQ among its order types, and Kraken offers an RFQ portal alongside trading by voice (both accessed September 2026).
TWAP
Time-weighted average price: an order split into smaller pieces and executed at regular intervals. Coinbase Prime describes it as designed to execute large orders over time to minimize market impact (Coinbase, accessed September 2026).
Delivery-versus-payment (DvP)
A settlement convention in which each side's delivery depends on the other's, so neither party pays without receiving. No desk we read publishes a DvP mechanism for crypto, so treat it as a question to ask rather than a feature to assume.
Pre-funding
Sending cash or coin to a bitcoin OTC desk before it will trade with you. The alternative is trading on credit and settling afterwards, which desks extend only to counterparties they have onboarded, within limits their risk teams set.
Spread
The difference between the price a desk will buy at and the price it will sell at. On a principal desk the spread is the cost of the trade, because it sits inside the quoted price rather than being charged as a commission.
Market impact
The price movement your own order causes. It is why large tickets go to a desk rather than an exchange order book, and why execution is spread over time or handed to a desk that takes the risk onto its own account.

Assets in scope

Stablecoin
A token designed to hold a fixed value against a currency, usually the US dollar. USDC and USDT are the two most used in crypto-backed lending, both as loan proceeds and, at higher LTV limits, as collateral.
Spot bitcoin ETF
An exchange-traded product holding bitcoin directly. The Securities and Exchange Commission approved the listing of the first spot bitcoin products on 10 January 2024. The shares are securities, so borrowing against them follows securities margin rules.

Onboarding and compliance

KYC
Know your customer: the identity verification a lender or desk carries out before dealing with you. That firm does it, not an introducer, and no crypto-backed loan or desk trade of size proceeds without it.
KYB
Know your business: the same checks applied to a company, trust or fund, including the people behind it. The US customer due diligence rule defines a beneficial owner as anyone holding 25% or more of the equity, plus one person with significant control.
Source of funds
Evidence of where the money or coin in a particular transaction came from: a sale, a salary, a disposal, an inheritance. It concerns the specific assets moving, not your wealth in general.
Source of wealth
Evidence of how your overall wealth was built. UK money laundering rules require firms to establish source of wealth and source of funds for politically exposed persons, and firms apply the same checks more widely on a risk basis.
AML
Anti-money laundering: the program of checks, monitoring and reporting a regulated firm runs. In the United States, money services businesses must include verifying customer identification in that program.
Travel Rule
The requirement to send originator and beneficiary information with a transfer. The US rule applies to transmittals of US$3,000 or more; the UK has applied it to cryptoasset transfers since 1 September 2023, and the EU regulation since 30 December 2024.

Tax

Disposal (disposition)
The event that can create a taxable gain: selling crypto for currency, exchanging it for another asset, spending it, or giving it away. Moving coins between your own wallets is not one. Whether posting collateral is depends on the loan terms.
Capital gains tax (CGT)
The UK tax on gains from disposals. For 2026 to 2027 the annual exempt amount is £3,000, and gains are taxed at 18% within the basic-rate band and 24% above it.
Form 1099-DA
The US information return brokers file for digital asset sales. Gross proceeds are reported for transactions effected on or after 1 January 2025 and basis for certain transactions from 1 January 2026, and you must report gains whether or not you receive one.

The mechanics behind these words are worked through in the guides: how do crypto loans work, bitcoin loan margin calls, bitcoin loan rehypothecation and are crypto loans taxable.

Primary sources

Where to go next

For a holder reading a loan agreement or a desk’s terms for the first time, the guides take these definitions apart in context.