Digital Assets: Security Interests

Summary

This practice note describes how to create a security interest and perfect cryptocurrency assets in connection with a loan financing. The most basic structure of a secured loan, regardless of its size, is that a lender makes funds available to a borrower in exchange for promises, including the promise to repay or, short of that, to allow the lender to recoup the loan through the borrower's assets. Over time, the law and financial industry have adapted to allow any conceivable asset of the borrower to be pledged to lenders in this way. Digital assets are no exception, though they have presented challenges.