Ledger Wallet Loans Leave Wrapped Bitcoin Collateral Exposed to Liquidation

Ledger Wallet’s Crypto Loan feature lets eligible users borrow stablecoins against wrapped Bitcoin tokens, but a loan that crosses its market’s limit can trigger liquidation of the pledged collateral. The feature rolled out Wednesday, Oct. 21, with four Ethereum pairings: WBTC or cbBTC as collateral, and USD Coin (USDC) or Tether (USDT) as the loan. The collateral is wrapped Bitcoin held on Ethereum, not Bitcoin (BTC) transferred directly from the Bitcoin network. Users choose a collateral and loan pair and set the amount to borrow, subject to eligibility and regional availability.