Technique founder Michael Saylor just lately took to the X social media community to make clear that the corporate truly buys actual Bitcoin.
The CEO asserts that MicroStrategy audits its custodians and rejects the harmful follow of rehypothecation.
In a fiery change on X, the MicroStrategy founder pushed again in opposition to considerations raised by cypherpunk and Casa co-founder Jameson Lopp.
The controversy started after Saylor introduced MicroStrategy’s newest acquisition on Jan. 26. As reported by U.As we speak, the corporate bought a complete of two,932 BTC for $264 million. This introduced the agency’s complete stack to a staggering 712,647 BTC following latest mammoth purchases.
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Regardless of the provision shock, Bitcoin’s value motion remained eerily stagnant. MicroStrategy purchased practically 4x the quantity of Bitcoin mined globally in 2026 up to now, however the value barely budged.
Lopp then triggered fairly a stir on social media by implying that Technique doesn’t truly purchase actual Bitcoin.
“Does Technique truly confirm that their bitcoin solely belongs to them and is not rehypothecated? I am skeptical,” he stated. Nevertheless, Saylor rapidly took to X to reject this narrative.
Rehypothecation, defined
MicroStrategy depends on third-party custodians (like Constancy or Coinbase Prime). Lopp questioned how Saylor is aware of these custodians aren’t lending out his large stack to generate yield.
Rehypothecation happens when a financial institution or dealer takes belongings that belong to a consumer and makes use of them for their very own functions. Such an asset could be lent out to different events or used as collateral for their very own trades.
Such a controversial follow creates a “paper declare” on the asset. If the financial institution or the borrower fails (as seen with FTX, Celsius, and BlockFi), the unique proprietor could discover that their belongings are gone.
“Actual Bitcoin” means the unencumbered asset sits in a particular deal with on the blockchain. “Rehypothecated Bitcoin” implies that the identical coin is likely to be promised to a number of folks.
“Individuals ask for proof of reserves since they do not even know what monitoring/assurances you place in place,” Lopp retorted.