Inside the Wall Street Practice that Could Ruin Bitcoin

Note: This is part 3 in a multi-part article series exploring rehypothecation and commingling in bitcoin and other cryptocurrency markets. Part 1 and part 2 are interviews with Caitlin Long and parts 3 and 4 ask the question, “How did we get to a place that where laws look like this?”

In order to understand why Wall Street veteran and cryptocurrency advocate Caitlin Long thinks that “rehypothecation” and “commingling” are going to be much-discussed topics in the cryptocurrency industry, we must understand Long’s background. The best way to do this is to look at rehypothecation and commingling in the context that Long did — traditional securities — and to understand that we need to explore where the modern broker-dealer collateralized by the repo (repurchase) market and asset-backed commercial paper (ABCP).

At the beginning of our conversation, Long says that everyone’s “backgrounds bring them to who they are today and bring them the knowledge base for…