Ledn, a crypto lender operating in over 130 countries, wants to expand its services within the U.S. and is eyeing approvals on the West Coast as Wall Street competitors lean into the space.

“We just submitted our application to the state of California,” Ledn co-founder and CEO Adam Reeds told Decrypt in an interview. “As the Bitcoin price increases [and] more people own Bitcoin, that’ll help justify the compliance costs of opening up in new regions.”

Established in 2018, Ledn is among the largest centralized crypto lenders left standing after a series of high-profile blowups reshaped the sector in 2022, according to a report from Galaxy Digital.

Galaxy noted that it, stablecoin issuer Tether, and Ledn accounted for 90% of $11.2 billion in outstanding loans, as of the end of last year.

The metric is still well off 2022’s $34.8 billion peak—juiced by now-defunct firms like BlockFi and Genesis—but with financial titans like Cantor Fitzgerald building its own Bitcoin financing arm, Reeds argued the market could soon see massive shifts.

Adams said 90% of the firm’s business involves lending U.S. dollars to individuals that don’t want to sell their Bitcoin, originating loans that can be as small as $500. Firms like Cantor will open up more funding sources, lowering Ledn’s cost of capital, and helping the firm “deliver services at a better cost for individuals,” Adams argued.

“As institutions come in, the lowest hanging fruit is for them to deploy big dollars at scale,” he added. “It becomes less of a scary pioneering, and it switches to a boardroom FOMO issue, where Cantor’s competitors say, ‘Why are we not doing this too?’”

Prior to U.S. President Donald Trump’s reelection, one might point to former SEC Chair and crypto skeptic Gary Gensler. Critics argued that the Commission’s emphasis on enforcement actions chilled innovation and deterred traditional finance firms under his watch.

Although Gensler has resigned, and the regulator has adopted a crypto-friendly stance, Ledn operates across a patchwork of lending licenses in the U.S. The firm currently operates in 39 states, with California and Tennessee among the largest by population outstanding.

Global Impact

Adams believes Ledn could eventually become licensed within all 50 states. But at the same time, a large portion of $1.5 billion in assets on Ledn’s platform is tied to the Global South. The overall amount of assets on Ledn’s platform has increased 140% over the past year, he said.

Ledn has gained traction in countries that have poor property rights, Adams explained, allowing users to access capital on a level playing field when pledging assets like land may not be feasible.

“In most countries, lending is for the rich,” he said. “We now can actually stop disadvantaging people that are just at the luck of the draw of where they were born.”

In that sense, the emergence of institutions like Cantor are a notable windfall, according to Zack Pokorny, research analyst at Galaxy. More competition should lead to lower fees and increased liquidity should make loans cheaper, he told Decrypt.

“It should make things cheaper and allow things to scale a bit faster,” he said. “We have general operational costs decreasing, combined with this possibility of decreased cost of capital.

In terms of reputation, Pokorny said the centralized crypto lenders are still living in the shadow of 2022.  But the overall space has become more transparent as users gravitate toward decentralized finance, or DeFi, which now accounts for 60% of total cryptocurrency borrows.

Referencing the DeFi lending protocol Aave, Pokorny noted that (wrapped) Bitcoin is becoming a more common form of collateral, mirroring Ledn’s purported bread-and-butter.

“It is quite popular,” Pokorny said. “Bitcoin is now most likely used [form] collateral on Aave on Ethereum, which is the largest on-chain lending market.”

Edited by James Rubin and Stacy Elliott.