There have been USD stablecoins that tried backing themselves with Bitcoin and they went bankrupt the second they had bank runs, eg. Luna/USTerra.
The SEC is acting as if they would stop such illegal “securities” from defrauding investors, yet what microstrategy , a publicly traded company is doing, is extremely similar.
They are paying a yield to investors who acquire their USD convertible notes, that are backed by the companies Bitcoin holdings, in other words USD debt/convertible-notes/tokens, backed by their cryptocurrency – Bitcoin holdings.
People lost their life savings in the Luna/USTerra scheme, but the MSTR scheme is somehow legal – yet it could have the same end result.
Can someone please explain to me whats different, is it just because they are an LLC added to their scheme or something? Or they are backing the debt by “nothing” rather than saying its their Bitcoin (which it obviously would be backed by – what other value do they have which would convince people to acquire their convertible-notes)?
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