Digital asset lender Ledn is transitioning to fully collateralized Bitcoin lending and discontinuing support for Ethereum, in moves designed to consolidate its BTC-focused business and further safeguard client assets against credit risks.
In adopting a full custody structure for Bitcoin (BTC) loans, Ledn will no longer lend out client assets to generate interest, the company disclosed on May 23. Instead, Bitcoin collateral will remain under full custody by Ledn or one of its designated funding partners.
“This means assets aren’t rehypothecated, reused, or loaned out to generate yield,” Ledn co-founder and CEO Adam Reeds told Cointelegraph.
Reeds said the move brings the company back to its roots and aligns more closely with Bitcoin’s founding principles.
“Bitcoin was created as a direct response to the risks of fractional reserve banking and unchecked use of client assets to generate interest,” said Reed, adding:
“Traditional finance relies on constantly reusing client assets to