Ledn Loans

A Dollar Loan from Ledn allows you to borrow funds against your Bitcoin (BTC) or Ethereum (ETH) without selling your digital assets. This means you can keep your digital assets intact while accessing liquidity in USD or USDC.

To qualify for a Dollar Loan, you only need to have a minimum of $1,000 USD worth of eligible digital assets in your Transaction account to be used as collateral. Alternatively, you can send the collateral from an external source.

Please note that in some eligible regions, loans may be subject to minimum principal requirements or require confirmation of commercial purpose.

How It Works:

• Collateral & Loan-to-Value (LTV): Loans are typically issued at a 50% LTV. For example, if your BTC or ETH is worth $10,000, you can borrow up to $5,000.
• Interest Rates Fees & Terms:
  • Loans have a standard 12-month term, with flexible repayment options.
  • No Prepayment Penalties: You can repay your loan early without incurring extra charges.
  • Interest Calculation: Interest on Ledn Loans accrues on a daily basis. Interest rates vary based on your loan type (Standard vs. Custodied) and jurisdiction.
  • Interest Payments: Interest payments and any applicable fees are not due until the loan is closed.
  • Admin Fees: There is a 2% administrative charge at Loan origination. Admin fees are not applicable to clients residing in Canada and the United States.

Collateral Management Options:

• • • Standard Loans: For these loans, Ledn has the right to lend the collateral to institutions to earn interest, which in turn, Ledn uses to lower the interest rate of these Standard loans.
    • Custodied Loans: The collateral you post to secure your loan may only be re-posted by Ledn to a trusted institutional USD funding partner, such as a bank, credit fund or other corporate funding partner. Collateral is held securely in segregated and verifiable on-chain addresses, ensuring that the collateral is legally ring-fenced from a funding partner’s assets and protected even in the unlikely bankruptcy of our funding partner. Collateral is held securely in custody throughout the loan. Neither Ledn nor the institutional partner has the right to lend out your collateral to generate interest. The interest rate for these loans will be higher than Standard Loans and reflect the fact that the Custodied Loan collateral is ring-fenced from any credit risk related to rehypothecation or lending activities relating to Standard Loans and Ledn Growth accounts.

Key Benefits:

• Quick loan disbursement, typically within 24 hours of receiving collateral.
• No early prepayment penalties and no payments until your loan is closed.
• Flexible repayment in BTC, ETH, USDC, or via wire transfer.

Ledn offers two options for collateral management in Dollar Loans: Standard Loans and Custodied Loans. The differences between these two loan types mainly revolve around the use of collateral and the associated credit risk.

Use of Collateral

• Standard Loans:
  With Standard Loans, Ledn has the right to rehypothecate the collateral you post. The primary purposes of rehypothecating collateral are:
  1. To secure USD to finance the loans.
  2. To generate interest, which helps lower the interest rate you pay.
     Collateral posted for Standard Loans is ring-fenced from the credit risk associated with Ledn Growth accounts, meaning that exposure is limited solely to rehypothecation activities related to the Standard Loans. Detailed information on these practices can be found in our Open Book Report and your Ledn dashboard.
     
     
• Custodied Loans:
  For Custodied Loans, the collateral you post to secure your loan may only be re-posted by Ledn to a trusted institutional USD funding partner, such as a bank, credit fund or other corporate funding partner. Collateral is held securely in segregated and verifiable on-chain addresses, ensuring that the collateral is legally ring-fenced from a funding partner’s assets and protected even in the unlikely bankruptcy of our funding partner.
  Collateral is held securely in custody throughout the loan. Neither Ledn nor the institutional partner has the right to lend out your collateral to generate interest.
  Custodied Loan collateral is also ring-fenced from any credit risk related to rehypothecation or lending activities relating to Standard Loans and Ledn Growth accounts.

Interest Rate Differences

The interest rate for Custodied Loans is higher than that of Standard Loans. This reflects the fact that the Custodied Loan collateral is not used to generate interest, offering you an added layer of safeguards.

Applying for a Dollar Loan is easy. Just follow these steps:

1. Log into Your Ledn Account: Navigate to your dashboard.
2. Select the Loan Type: Choose "BTC-backed" or "ETH-backed" loans.
3. Fill Out the Application: Provide the loan amount and collateral information.
4. Submit Collateral: Once approved, transfer collateral to the provided wallet address:

• Go to your Loan Tab.
• Click  ‘Send Collateral’
• Select the ‘Transaction Account’ Option or the ‘External Source’ Option depending on your preference, enter the amount and click ‘Submit’

5. Receive Funds: Disbursement typically occurs within 24 business hours after collateral verification.

Ensure accurate details during the application to avoid delays. 

Ledn Dollar Loans are available globally; however, availability depends on your country or region due to regulatory reasons.

To check whether Dollar Loans are available in your jurisdiction, please visit our Eligibility Page.

Restricted Regions

Certain jurisdictions currently do not support Dollar Loans due to regulatory limitations. These include, but are not limited to:

• U.S. States: California, Connecticut, Hawaii, Louisiana, Nevada, North Dakota, South Dakota, Tennessee, Vermont, Washington, and Washington D.C.

• Canadian Provinces: New Brunswick, Nova Scotia, Saskatchewan, Quebec

• Other International Regions: For the full list, refer to our Legal Ineligible Jurisdictions

Additional Requirements

In some eligible areas, loans may be subject to minimum principal requirements or confirmation of commercial purpose. Contact Ledn Support for assistance in determining availability in your location.

B2X is a loan product that enables clients to double their Bitcoin holdings. It provides a loan that is automatically used to purchase additional BTC, using both the original and newly acquired Bitcoin as collateral for the loan.

You only need a minimum of $500 USD worth of BTC in your BTC Transaction account when applying for a B2X Loan.

Mechanics:

• BTC Collateral: If you have a balance in your BTC Transaction account, the B2X service provides you with a loan which is automatically used to buy more BTC.
• Double Your Holdings: Ledn uses the loan proceeds to purchase an equal amount of BTC, effectively doubling your position.
• Loan Principal is always contracted in USD. 
• Loan Term: 12-month loan term.

Interest Rates Admin Fees & Terms:

• Interest Calculation: Interest accrues on a daily basis and is not due until you close the loan.
• Admin Fees: There may be a 2% administrative charge at Loan origination. 
• Collateral management: B2X loans are currently only available with Standard Loan collateral treatment. 
• Flexible Repayment: Repay at any time within the 12-month term using BTC, USDC, or via wire transfer.

B2X is ideal for clients looking to increase their BTC exposure accessing a loan to buy more Bitcoin. 

To open a B2X Loan:

1. Log into Your Ledn Account: Ensure your BTC Transaction Account has a balance.
2. Use the B2X Calculator: Enter the amount of BTC you wish to double. The platform will display loan details.
3. Confirm and Place Order: Follow prompts to your loan request, add your TOTP Code to confirm the transaction and you will receive an email with further instructions.

B2X Loans are available in several regions but come with specific restrictions:

Unavailable In:

• United States and Canada
• Certain Countries: You can check availability in your location by visiting our eligibility page here.

Ledn offers flexible repayment options for clients to manage their loans:

1. BTC or ETH Collateral:
   • Repay your loan directly using BTC or ETH through the platform, ensuring real-time settlement.

Note: For US residents, the Repay with collateral option is currently in the following States: Alabama, Arizona, Florida, Georgia, Idaho, Illinois, Indiana, Kentucky, Massachusetts, Minnesota, Missouri, Michigan, Montana, Nevada, Pennsylvania, South Carolina, Texas, Utah, Wisconsin, and Wyoming.

This list may change from time to time, and Ledn cannot guarantee your jurisdiction will be or remain available for any period of time.

2. Wire Transfer:
   • Make payments in USD by choosing the wire payment option. Processing may take up to 5 business days.
3. USDC Payment:
   • Use your USDC balance in your Transaction Account for quick and seamless repayment. 

Early repayments are penalty-free, giving you control over how and when you settle your loan.

The Loan-To-Value (LTV) ratio represents the relationship between the loan amount and the value of the collateral used to secure the loan. At Ledn, loans are issued in either US Dollars (USD) or USD Coin (USDC) and are generally set at an initial LTV of 50%.

This means that the funds you borrow are equivalent to 50% of the value of your digital asset collateral. For example, if your collateral is valued at $10,000, you can borrow $5,000.

The LTV is an important factor in managing your loan, as it determines the health of your collateral in relation to market fluctuations.

What Happens if the LTV Increases?

If your LTV increases, it means that the value of your collateral has decreased in relation to the outstanding loan outstanding balance. In such cases, you will be required to take action to avoid potential liquidation.

To prevent liquidation, you can:

1. Add more collateral to your loan.
2. Make a partial repayment to lower the loan outstanding balance.

If your loan reaches specific LTV thresholds, you will receive email notifications prompting you to take action:

• At 70% LTV, you will receive an initial alert to add collateral.
• At 75% LTV, a follow-up reminder will be sent.
• At 80% LTV, an automatic liquidation of your collateral will occur to repay the loan outstanding balance.

For more details on how to manage an increasing LTV, please refer to our Help Center article:
What Happens If the BTC or ETH Value Significantly Decreases?

What Happens if the LTV Decreases?

If your LTV decreases, it means that the value of your collateral has increased in relation to your loan outstanding balance. In this case, you may be eligible to redeem a portion of your collateral, provided that certain conditions are met.

Collateral can be redeemed as long as your loan maintains an LTV that meets Ledn's requirements for a healthy loan status. This process ensures that you can access your assets while keeping your loan secure.

For more information on how to redeem excess collateral, please visit our Help Center article:
How to Redeem Excess Collateral

Stay Informed and Manage Your Loan Effectively

To ensure your loan remains in good standing, we recommend regularly monitoring your LTV in your Ledn account. If you have any questions or need assistance, our support team is always available to help.

A loan top-up allows you to add more collateral, lowering your Loan-to-Value (LTV) and minimizing the risk of liquidation:

How to Top-Up:

1. Select “Top-Up” on Your Loan Dashboard: Log into your account and choose your loan.
2. Choose a Source: You can top up using funds from your Transaction Account or an external source.
3. Confirm: Upon confirmation, your LTV will be adjusted.

This feature ensures your loan remains secure during market fluctuations.

Ledn offers flexible options for renewing or refinancing your existing loans:

Loan Renewals:

• Automatic Renewal: If your loan’s LTV is at or below 60% at maturity, it may be automatically renewed under a new loan agreement which may include a new administration fee and the new interest rate will be the one in force at the moment of renewal. The basis for calculation will be the Outstanding Balance at the moment of renewal. 
• Canadian Clients: Clients in Quebec, New Brunswick, Nova Scotia, and Saskatchewan are not eligible for automatic renewals.

Refinancing:

• Loans can be refinanced after being open for 30 days. Refinancing can help adjust terms, switch loan types, or secure better rates. A refinance will also be subject to the terms of a new loan agreement which may include a new 2% admin fee.  The basis for calculation will be the Outstanding Balance at the moment of the refinance. 

Please note that the refinancing/renewal of a Loan does not release additional fiat or collateral. 

If your loan is overcollateralized, you may be eligible to redeem or unlock part of your Bitcoin collateral through our Excess Collateral Redemption feature. This allows you to access funds when your Loan-to-Value (LTV) ratio drops below the redemption threshold.

What Is Excess Collateral Redemption?

Excess Collateral Redemption allows you to withdraw part of your collateral if your LTV drops below 30%, bringing it back up to a target LTV of 40%. This is often used by clients who want to:

• Release or unlock BTC / ETH collateral
• Withdraw collateral
• Access funds without closing the loan
• Use released funds for trading, earning interest, or opening a new loan

Eligibility Requirements: 

• The loan has been active for more than 60 days
• Your current LTV is below 30%
• You have not redeemed collateral in the last 60 days
• You have at least $100 USD worth of redeemable collateral available (maximum: $100,000 USD every 60 days)

How to Redeem Collateral

• Go to the “Active Loans” tab in your Ledn Dashboard.
• If your loan is eligible, you will see a “Redeem Collateral” button.
• Click it to unlock the available amount. 

The BTC will be transferred to your Transaction Account, where you can use it as needed.

Notes

• The released BTC/ETH can be used to earn interest, trade, or increase your loan principal if your jurisdiction is eligible. 
• The collateral redemption does not act as a loan refinance or increment loan amounts.

Auto Top-up is a simpler and more intuitive way to Top-up your Ledn Loan collateral address(es), removing the need to manually monitor and manage your open loans’ status during times of price volatility.

Features:

• Automatic Adjustments: When your LTV hits 70%, funds from your Transaction Account are automatically added to your collateral wallet address to bring the LTV back to 50%.
• How to Enable: Toggle the Auto Top-Up feature in your loan settings.

In case you don't hold enough balance to bring back your loan's LTV to 50%, our system will still withdraw all available balance in your BTC or ETH Transaction account to top up your loan's collateral.

In the event that there's no remaining balance on your BTC or ETH Transaction account to top up your loan's collateral, you will receive a notification email informing you that, due to lack of available funds, we were unable to Auto Top-up your loan(s). In this case, you will need to continue with manual top up.