Toronto, ON – Ledn, a leading CeFi lending platform, announced today its decision to phase out Ethereum (ETH)-collateralized loans and BTC/ETH yield accounts effective July 1, 2024. The platform will transition exclusively to a custodial Bitcoin-backed loan model, prioritizing asset security and eliminating third-party credit risks.
Key Changes in Ledn’s New Business Model
ETH Loan Discontinuation:
- Existing ETH-collateralized loans must be settled by June 30.
- No new ETH loans will be issued after this date.
Yield Account Sunset:
- BTC/ETH dual-asset yield accounts will cease operations.
- Users are advised to withdraw funds before the deadline.
Bitcoin-Only Focus:
- All future loans will be backed solely by Bitcoin (BTC).
- Assets will be held under Ledn’s custody or trusted partners.
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Rationale Behind the Strategic Shift
According to Ledn, the move aligns with its "security-first" mandate to:
- Mitigate counterparty risks inherent in multi-asset lending.
- Streamline operations by concentrating on Bitcoin’s liquidity and institutional-grade custody infrastructure.
- Enhance transparency with 1:1 asset backing.
"This pivot ensures users’ Bitcoin holdings remain fully reserved and auditable," stated Ledn’s Chief Risk Officer in TheBlock’s coverage.
Implications for Crypto Borrowers
| Aspect | Previous Model | New Model (Post-July 1) |
|--------|---------------|-------------------------|
| Collateral | BTC + ETH | BTC only |
| Custody | Hybrid (Self + Third-Party) | Fully Custodial |
| Risk Profile | Moderate (Multi-Asset Exposure) | Low (Bitcoin-Centric) |
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FAQ: Addressing User Concerns
Q1: Can I still earn interest on ETH after July 1?
A: No. ETH-related yield products will be discontinued.
Q2: How does this affect my existing BTC loans?
A: No changes. BTC loans continue under enhanced custody.
Q3: Will Ledn support other assets in the future?
A: The platform reaffirms its Bitcoin-exclusive focus for 2024–2025.
Q4: Is my ETH collateral safe during the transition?
A: Yes, but users must repay loans or convert collateral by June 30.
Industry Context
The shift reflects broader CeFi trends toward:
- Regulatory compliance (e.g., NYDFS guidelines).
- Demand for simpler, auditable products post-2022 lending crises.
Analysts note parallels with BlockFi’s 2023 restructuring but emphasize Ledn’s proactive risk management as a differentiator.
Next Steps for Users
- Review active ETH loans and plan repayments.
- Withdraw ETH funds from yield accounts before July 1.
- Consider Bitcoin-collateralized alternatives for future borrowing needs.
For real-time updates, monitor Ledn’s official communications.