Ledn became in February the first ever issuer of bonds securitizing loans backed by bitcoin, completing a $188 million, Rule 144a deal that was oversubscribed by 2.5 times. The eight-year-old, Cayman-based firm was co-founded by Mauricio Di Bartolomeo, currently the firm's chief security officer, who grew up in Venezuela and saw first-hand the benefits of bitcoin in an environment of hyperinflation when his brother began mining it.
Di Bartolomeo began his own bitcoin mining operations in Canada with college friend Adam Reeds, Ledn's current CEO, and in 2018 they established the lender specializing in bitcoin-collateralized loans, issuing its first loan in November of that year. They had recognized that bitcoin miners the world over faced the same issue: the need to cover expenses billed in fiat currencies without selling their coins and incurring taxes.
Everything was working as designed, and the system was able to liquidate loans whenever required.
bitcoin-backed loans provided a solution, and a number of competitors emerged. But by 2023 numerous cryptocurrency lenders had imploded, including BlockFi and Genesis Capital. Ledn, however, stuck to its model of focusing on providing loans collateralized by bitcoin—no other cryptocurrencies. Since inception, it has provided more than $3 billion in loans, with nearly half of that originated since the start of 2025.
Ledn came to market with its ABS deal as bitcoin's price sharply declined between mid-January and mid-February—a coincidence that initially might appear unfortunate but became a benefit.
"One of the big questions was how our risk engine would handle major volatility events," De Bartolomeo said. "We pulled data in real time to show investors that everything was working as designed, and the system was able to liquidate loans whenever required."
De Bartolomeo recently spoke to Asset Securitization Report (ASR) about its trailblazing ABS transaction and what its success signifies for the cryptocurrency and ABS markets.
ASR: What types of investors signed on to the deal?
De Bartolomeo: We booked more than 50 calls during the roadshow. There were 15 investors including one large reinsurance company that took a relatively large portion of the senior tranche. The junior tranche was more than three times oversubscribed and attracted mostly hedge funds looking for yield.
ASR: What else attracted investors?
De Bartolomeo: First was the understanding of our risk management process. Seeing how our system handled their concerns in real-time fed into the idea, "Wow, if this product has this type of resilience in the market we're seeing now, then I can get more comfortable with the risk." In addition, it was rated by S&P Global, Jefferies Group was the lead underwriter, and we selected Fidelity Investments, a very trusted name, as the custodian.
People investing in this bond are not really getting price exposure to bitcoin.
ASR: How does the deal's success reflect on bitcoin?
De Bartolomeo: There was definitely a spectrum of understanding about cryptocurrencies among the different entities we met with; some were very well versed on bitcoin's ecosystem and technology, and others were fairly new. But if we had had those meetings five years ago, nobody would have been on the advanced side of the house. And the several teams dedicated to crypto that we spoke to are a huge signal that institutional investors are working to understand the crypto markets better. In addition, If you can get north of 6% on the senior tranche and 9.99% on the junior, from a firm that's been operating for eight years and never had a single loss, that's an attractive risk/reward.
ASR: However, bitcoin has been very volatile.
De Bartolomeo: People investing in this bond are not really getting price exposure to bitcoin. They're getting yield and the protection of bitcoin's 24/7 collateral, enabling lenders to sell or liquidate collateral when they need to. I would argue that lending against an asset that trades 24/7 is less risky than even equities, which don't trade over the weekend and leave lenders unable to liquidate those securities being used as loan collateral.
ASR: Did Ledn exercise significant margin calls when bitcoin's price fell?
DeBartolomeo: All of our bitcoin-backed loans start at a 50% loan-to-value ratio, so borrowers put up $2 of bitcoin for every $1 they borrow. When bitcoin's price drops and a loan reaches 70% LTV, we encourage the borrower to top up the collateral, and we send another notification once the LTV reaches 75%. This is a notification-based process rather than a traditional margin call; we want to give Ledn borrowers time to respond and make informed decisions rather than force immediate action. We also allow clients to pre-authorize additional collateral to be automatically sent to their loan(s) when LTVs reach 70%.
ASR: Will other firms securitize assets collateralized by cryptocurrencies?
De Bartolomeo: We've said we want to be a blueprint for other firms to follow. There are other lenders offering loans backed by bitcoin, Ether and other cryptocurrencies. To bring a deal to market, they'll need a large enough book to do a meaningful offering and be able to replenish the facility as loans are repaid or liquidated.
We're lending to thousands of consumers and businesses in different parts of the world, reducing concentration risk, and we always use bitcoin as collateral. We also have a comparatively long track record, and every month a U.S.-based certified public accounting ensures Ledn has enough bitcoin to cover client obligations through our Proof of Reserves program. There's a simplicity to our focus.
Given the sheer scalability of the ABS structure ... we anticipate doing more deals.
ASR: Can you elaborate on that?
De Bartolomeo: We accept only bitcoin as collateral and our loans are denominated in U.S. dollars. We do not re-lend the bitcoin, and at all times the collateral stays in custody at Ledn or is held in trust by one of our funding counterparts, such as Tether. There's basically nothing happening to that bitcoin other than sitting in qualified custody.
ASR: Do you anticipate accessing the ABS market regularly?
De Bartolomeo: That will depend on how we continue to grow and the sources of funding available. But given the sheer scalability of the ABS structure, and its permanence and transparency, we anticipate doing more deals.
Our cost of capital is improving. As investors continue to better understand the risk, that cost will fall, and we'll be able to drop our rates to our end-consumers, who will be able to do more of these loans. So it should be a bit of a virtuous cycle.
ASR: What are borrowers using the loan proceeds to do?
De Bartolomeo: Mainly to buy real-life properties or make real-life investments. Many bitcoin early investors and entrepreneurs are asset rich, but that's not apparent from their income and tax statements. So they're effectively blocked out of traditional financial services. With Ledn, the only criteria to apply for a loan is whether you're in a jurisdiction we can service and meeting know-your-customer (KYC) requirements. We don't ask for your credit score or income.
ASR: How big do you see the bitcoin-backed loan market getting?
De Bartolomeo: bitcoin is a $1.5 trillion market today that we believe will grow to $3 trillion to $5 trillion in the next five years, with bitcoin-backed loans becoming a $1 trillion market. And if you look at the markets where that liquidity can be sourced from, the one that stands out is the $3 trillion ABS market in the U.S. That's one of the big reasons for this deal, to ensure we have access to scalable, permanent capital to continue scaling the business.
