Ledn vs BlockFi
Ledn — same reason as the Celsius comparison: rehypothecation, transparency, and FTX counterparty exposure are not abstract risks.
All rates verified weekly · See the BCL Rate Index for sources, last-verified dates, and methodology.
The short answer
For a brief window in 2020-2021, Ledn and BlockFi looked like direct competitors — both offered BTC-backed loans, both targeted retail crypto holders, both were marketing-heavy and growth-focused. Then the structural choices each made before the crisis produced opposite outcomes. BlockFi filed for Chapter 11 bankruptcy on 28 November 2022 with roughly $355 million tied up in failed FTX exposures and a balance sheet that could not absorb the cascade. Ledn used the same window to publish proof-of-reserves attestations, refuse rehypothecation on BTC loans, and tighten custody. As of 2026, BlockFi exists only as a wind-down entity working through creditor distributions; Ledn is funding new loans and publishing the Open Book Report.
Ledn
Operating- Founded
- 2018
- HQ
- George Town, Cayman Islands
- Rate
- 9.99–11.49% APR
- Max LTV
- 50%
- KYC
- Required
- Proof of Reserves
- Yes
- Overall score
BlockFi
Not operating in 2026Historical reference only. BlockFi is not operating as an active lender in 2026 — this comparison exists because the contrast is informative for evaluating live alternatives.
Head-to-head, criterion by criterion
Ledn is operating normally. BlockFi exited bankruptcy in 2023 as a wind-down entity and does not offer new loans or accounts. The wind-down focuses on distributing recovered assets to creditors.
BlockFi had material counterparty exposure to FTX/Alameda — roughly $355M tied up when FTX collapsed in November 2022, per BlockFi's own bankruptcy filing. Ledn did not have FTX/Alameda counterparty exposure on its loan book. This single difference is most of why one survived and one didn't.
Ledn does not rehypothecate BTC collateral on its loan products. BlockFi rehypothecated to generate yield for its Earn product, and that exposure is what FTX/Alameda counterparty failure cascaded into.
Ledn published its first attestation in January 2021 and has continued every two quarters since. BlockFi never published a proof-of-reserves attestation. The post-bankruptcy filings revealed the gap that proof of reserves would have exposed earlier.
BlockFi paid $100M in February 2022 to settle SEC and state-securities-regulator charges over its BIA Earn product. Ledn has not faced equivalent enforcement actions, but operates under Cayman registration and adapted earlier to anti-rehypothecation positioning. Neither lender has a clean regulatory record by US standards; Ledn's record is materially better.
Context worth knowing
BlockFi was founded in 2017 in New Jersey, US. It grew rapidly through 2020-2021, reaching roughly 650,000 users at its peak. Its February 2022 SEC settlement ($100 million, the largest of its kind at the time) was a leading signal that the BIA Earn product was on regulatory shaky ground.
BlockFi filed for Chapter 11 bankruptcy on 28 November 2022 — three weeks after FTX's collapse. The bankruptcy filing disclosed approximately $355 million in assets stuck on FTX/Alameda counterparty positions and roughly $680 million in loans to Alameda Research. These exposures were not visible to BlockFi customers before the bankruptcy filing.
Ledn did not have direct FTX/Alameda counterparty exposure on its BTC-backed loan book. The fully-custodied loan model that Ledn maintained meant client collateral was not deployed into the kinds of institutional lending positions that brought BlockFi down. This is verifiable through BlockFi's bankruptcy disclosures and Ledn's proof-of-reserves attestations.
BlockFi's Chapter 11 plan was confirmed in mid-2023 and distributions to creditors began in late 2023. Recovery was partial. Most BlockFi accounts received distributions through the wind-down rather than recovering their full pre-bankruptcy balances.
The structural lesson from BlockFi specifically — beyond the general 2022 lender lesson — is that counterparty exposure to other crypto-native institutions is itself a meaningful risk. A platform that rehypothecates client collateral into another platform's products inherits that other platform's failure modes. Ledn's anti-rehypothecation policy is also an anti-counterparty-cascade policy.
Ledn vs BlockFi — frequently asked questions
Why did BlockFi go bankrupt?
BlockFi's bankruptcy was caused by counterparty exposure to FTX and Alameda Research that cascaded when those entities collapsed in November 2022. The exposure included roughly $355M in assets stuck on FTX, plus around $680M in loans to Alameda. When FTX filed for bankruptcy, those positions became uncollectable on BlockFi's timeline. The proximate cause was FTX; the structural cause was rehypothecation that exposed BlockFi to FTX in the first place.
Did Ledn have any FTX or Alameda exposure?
No direct counterparty exposure on the BTC-backed loan book. The fully-custodied loan model meant client collateral was not lent to FTX or Alameda. This is what the term 'fully-custodied' actually means in practice — your collateral cannot be on FTX's balance sheet because it cannot be on anyone's balance sheet other than the institutional custodian.
Are BlockFi customers still affected today?
Many former BlockFi customers received partial distributions through the bankruptcy plan in 2023-2024. Recovery percentages varied by account type. As of 2026, the wind-down is largely complete but specific account-level distribution status should be checked through the bankruptcy docket or recovery portal.
Is BlockFi coming back?
No. BlockFi exited bankruptcy as a wind-down entity, not as a re-launching company. The brand and underlying entity exist only to complete creditor distributions. There is no active BlockFi loan product in 2026 and no announced plan for one.
If BlockFi was regulated, why did it fail?
BlockFi's SEC settlement in February 2022 addressed marketing and disclosure issues with the BIA Earn product, not the structural rehypothecation that ultimately failed. Regulation as practiced was disclosure-focused, not solvency-focused. The lesson is that 'regulated' does not automatically equal 'solvent' — regulators can address consumer disclosure without addressing the asset-liability mismatch that produces failure.
Does this mean all CeFi lending is unsafe?
No. The pattern in 2022 was specific: rehypothecation + counterparty concentration + no proof of reserves. Lenders that avoided one or more of these (Ledn most clearly) survived. Lenders that combined all three (Celsius, BlockFi, Voyager) failed. CeFi is safe enough when the structural choices are right; identifying those choices is the borrower's job.
Sources
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