I'm not really the person to ask about that end of it... but I think these loans are actually a way of avoiding getting taxed for selling the crypto. So you let them hold the Bitcoin, for example, and they loan you fiat. When you pay back the loan, you get the full crypto collateral back and no sale is triggered.

Does that make sense?

It would be nice if someone chimed in right now to educate us both about the intricacies. The purchase and sale of crypto seems like more of the tax danger zone... peer to peer transactions to a cold wallet would be clear, but anything on exchanges is business as usual.