FAQs

BTCBacked connects borrowers and lenders directly. Borrowers access liquidity by using their Bitcoin as collateral, while lenders provide stablecoin loans (USDT or USDC) and earn interest. Every loan is secured by a 2-of-3 multisig escrow, and BTCBacked never takes custody of the collateral.

Every loan uses a 2-of-3 multisig wallet where the borrower, the lender, and BTCBacked each hold one key. At least two keys are required to move funds, so no single party ever has sole control.

BTCBacked is headquartered in Zug and AML-supervised as a member of VQF, a self-regulatory organisation officially recognised by FINMA. BTCBacked never takes custody of the collateral and cannot move it alone, your Bitcoin is never rehypothecated, and the platform fee is shown before you accept a loan. Built in Switzerland's Crypto Valley, BTCBacked brings security and transparency to peer-to-peer Bitcoin-backed lending.

Your Bitcoin sits in a 2-of-3 multisig escrow on the Bitcoin blockchain. You, your counterparty and BTCBacked each hold one key, and any two are needed to move it, so BTCBacked can never move it alone. If the platform goes offline, you and your counterparty can still move the collateral together, using BTCBacked's recovery tool. If you use your own wallet, the tool gives you a file to load into a wallet app such as Sparrow.

BTCBacked is open to individuals and companies that pass identity verification (KYC) and meet the eligibility rules in our Terms of Use, including its country restrictions. Bitcoin holders can borrow against their BTC to access liquidity, and stablecoin holders can lend and earn interest.

You pledge your Bitcoin as collateral and receive a stablecoin loan in return. Your Bitcoin stays in a 2-of-3 multisig escrow during the loan and is never rehypothecated. Once you repay in full, it is released to your refund address.

Selling means giving up your position and its future upside. Borrowing gives you liquidity now while you keep your Bitcoin, so if Bitcoin goes up, you still benefit. Because borrowing is not a sale, it typically does not trigger a taxable event, though this depends on your jurisdiction and is not tax advice.

Your Bitcoin sits in a 2-of-3 multisig wallet. You hold one key, the lender holds one, and BTCBacked holds one. Moving funds requires two signatures, so no one can act alone. Everything is verifiable on-chain at any time, and your Bitcoin is never rehypothecated.

LTV is what you owe, including interest for the full term, as a share of the current value of your Bitcoin collateral. For example, if you owe half of what your collateral is worth, your LTV is 50%. A lower LTV means more buffer against price drops. If LTV rises too high, a margin call or liquidation may be triggered.

BTCBacked monitors your LTV in real time. If it reaches 75%, 80% or 85%, you receive a warning prompting you to add collateral or repay part of the loan. If it reaches 90%, the loan is liquidated: the lender is paid first, up to what they are owed, then BTCBacked takes its 5% liquidation fee from what is left, and any remaining Bitcoin goes to your refund address. If you have not added one yet, it stays in the escrow until you do.

Borrowers pay a platform fee of 1.5% per year of the loan term, charged once, after confirming receipt of the loan. It is deposited into the escrow together with the collateral and paid from there. If a loan is liquidated, a liquidation fee of 5% of the original loan amount applies. Bitcoin network fees apply to escrow transactions.

You provide a stablecoin loan to a borrower who pledges Bitcoin as collateral. When the borrower repays, you receive your principal plus the agreed interest. You set or choose the terms that work for you.

Your loan is backed by the borrower's Bitcoin, locked in a 2-of-3 multisig wallet. You hold one of the three keys, and any two are needed to move the collateral, so BTCBacked can never move it alone.

BTCBacked monitors the LTV in real time. If it rises to 75%, 80% or 85%, the borrower is prompted to add collateral or repay. If it reaches 90%, the loan is liquidated and you are paid first from the collateral, up to your principal plus interest. If the collateral is worth less than what is owed, you bear the shortfall. A 5% liquidation fee is charged to the borrower. From 80%, you can pre-sign the liquidation so it can complete at 90% without you. If the loan changes before then, for example the borrower repays or adds collateral, the pre-signature lapses and you sign again.

If the borrower does not repay by the end of the loan term, the loan is liquidated. You are paid first from the collateral, up to your principal plus interest, before anything goes to the borrower. If the collateral is worth less than what is owed, you bear the shortfall.

There are no lender fees. The platform fee and any liquidation fee are paid by the borrower. You pay the network fees on your own transfers.