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By Austin DeNoce, Benzinga
In the wake of several lender failures within the crypto industry – such as Genesis, Celsius and BlockFi – following the collapse of FTX, the need for secure and transparent crypto lending has become a top priority.
The repercussions of these bankruptcies have instilled a cautious approach among holders and users of crypto, and for good reason. The ripple effects were seen across the entire industry, even affecting well-known entities like Binance and Kraken. This fallout from just a few years ago highlights the interconnected risks that still exist within the industry, as well as the necessity for robust risk management and transparency when considering a crypto financial services platform.
Ledn Stands Out For Security And Transparency
Ledn says it distinguishes itself from other platforms through its foundational commitment to transparency and security. Emulating the core principles of Bitcoin, Ledn was one of the first in the crypto lending industry to implement a Proof-of-Reserves attestation, performed biannually by a Certified Public Accountant. This process is enhanced by a pioneering third-party proof-of-reserves standard, setting a benchmark for accountability in digital asset management.
Ledn also provides clients with monthly open book reports detailing asset utilization and interest generation mechanisms so users know exactly where their yield is coming from. This level of clarity helps ensure that clients are not only informed, but are actively engaged in understanding the financial handling of their assets. Blind trust isn’t a viable strategy in crypto, so Ledn gives its users the tools and information they need to verify the security of their investments themselves.
BTC or ETH Backed Loans
Ledn’s BTC/ETH backed loans provide a secure and efficient method for crypto holders to access liquidity without liquidating their digital assets. Ledn offers loans denominated in US$ against Bitcoin or Ethereum as collateral and funded in local fiat currency. These loans are particularly advantageous as using BTC or ETH as collateral is generally not a taxable event. This means crypto holders can borrow against their crypto assets without selling them.
Key features of these loans include:
Control over use of collateral: Ledn offers both Standard and Custodied loan options. They say they are the only lender to give their clients control over the use of their loan collateral.
Annual interest rate: Starting at 12.4% with an APR of 14.4%, making it a competitive option in the crypto lending space.
Loan-to-Value Ratio (LTV): Set at 50%, this ratio ensures a balance between the loan amount and the collateral value, providing safety for both the borrower and the lender.
Accessibility: With a minimum requirement of $1,000 US$ equivalent in BTC or ETH collateral, these loans are readily accessible without the need for credit checks.
Flexibility and speed: Loans are typically funded within 24 hours of approval and borrowers have the flexibility to repay at any time without incurring penalties. This setup is ideal for those needing quick access to funds without the hassle of traditional loan agreements.
B2X Loans
The B2X loan product by Ledn is tailored for international Bitcoin holders looking to amplify their Bitcoin holdings without additional capital. This innovative product couples a Bitcoin-backed loan with an immediate purchase of an equivalent amount of Bitcoin, effectively doubling the borrower's Bitcoin position while maintaining the original collateral under loan. Below are some of the loan’s key features:
Instant execution: B2X loans are executed immediately, which allows borrowers to capitalize on market conditions using the Bitcoin balance in their Ledn Transaction account.
Competitive rates: The interest rates for B2X loans start at 12.4%, with an APR beginning at 14.4%, consistent with the rates of standard BTC/ETH backed loans.
Loan terms: These loans offer a 50% LTV ratio and terms up to 12 months, with the flexibility for early repayment without penalties, catering to both short-term and medium-term financial strategies.
Simplicity and accessibility: Like other Ledn products, B2X loans require a minimum of $1,000 USD equivalent in BTC collateral for automatic approval, bypassing traditional credit checks and making it straightforward for clients to increase their Bitcoin holdings efficiently.
A Reliable Partner In Crypto
Ledn's commitment to security, coupled with its innovative loan products, position it as a formidable entity in the crypto financial services sector. By prioritizing transparency and client security, Ledn adheres to high standards of asset management in order to build trust with its users. Whether through BTC/ETH backed loans or the unique B2X offering, Ledn provides compelling solutions for those looking to maximize the potential of their digital assets.
Read Ledn’s risk disclosure statement.
Featured photo by Brian Wangenheim on Unsplash.
Ledn builds innovative financial products with a mission to make generational wealth more accessible through digital assets. The company issued Canada’s first bitcoin-backed loan in 2018 and has issued nearly $5B loans since. Ledn is proud to help clients in over 130 countries access credit and savings products to grow their digital wealth. For more information, visit ledn.io.
This post contains sponsored content. This content is for informational purposes only and is not intended to be investing or tax advice.
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Adam Reeds
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