Ledn Launches Monthly Proof Framework for Bitcoin Lending in Era of Institutional Entry

Ledn, one of the world’s largest bitcoin lenders, has unveiled what it calls the “Open Book Report”—a monthly disclosure initiative designed to address a fundamental problem that devastated the crypto industry in 2022: the lack of transparency around how borrowed digital coin collateral is actually managed and used.

The timing is significant. Traditional financial institutions—including Citi, JPMorgan, Wells Fargo, BNY Mellon, Schwab, and Bank of America—are now entering cryptocurrency lending, but they’re doing so in a regulatory gray zone. With the passage of the GENIUS Act, which greenlit treasury-backed stablecoins, Wall Street has gained clearer pathways into the digital asset space. The risk, as Ledn warns, is that we could see institutional-scale lending crises if the same opacity persists.

When Digital Coin Lending Operated Without Guardrails

The 2022 crypto collapse exposed a critical vulnerability: when platforms like BlockFi, Celsius, and Voyager collapsed, the public discovered that lenders were rehypothecating client collateral—using customer assets as leverage in their own operations—with no meaningful disclosure. Nobody really knew how their bitcoin was being handled, whether it was pledged multiple times over, or what would happen in a liquidation scenario.

John Glover, Chief Investment Officer at Ledn and a former Managing Director at Barclays, captured the core issue: “If lenders do not have to disclose how they use client collateral, the clients become the leverage. We saw what happened when BlockFi, Celsius, and Voyager operated in the dark. The difference now is that the balance sheets are bigger.” His warning cuts to the heart of the problem—the industry never solved for transparency, it just got richer.

Regulators haven’t kept pace either. The US and UK have refused to implement Basel’s proposed framework on crypto capital requirements and proof-of-reserves standards. Meanwhile, IOSCO is pushing regulators globally to hold digital asset custody and lending to the same standards as traditional finance, yet almost no institution has voluntarily disclosed how bitcoin collateral is actually managed.

A Monthly Proof Standard for Bitcoin Collateral

Ledn’s approach attempts to reset expectations. The Open Book Report, launched recently, showcases what the company claims is “the industry’s longest-running proof of reserves.” Unlike companies that simply publish wallet addresses and call it transparency, Ledn combines multiple elements:

Independent Verification: The Network Firm LLP, a U.S.-based certified public accounting firm, independently audited and confirmed that 100% of Ledn’s collateral is held in custody—not rehypothecated or tied up in third-party arrangements.

Monthly Disclosure of Loan Book Metrics:

• $868 million in outstanding bitcoin-backed loans
• 18,488 BTC in collateral posted as security
• All collateral held 100% in BTC, stored in on-chain addresses and/or custodial accounts
• Average loan-to-value (LTV) ratio of 55%—well below industry liquidation thresholds

Semi-Annual Proof Attestations: Every six months, Ledn commits to proof-of-reserves attestations confirming that company assets exceed client liabilities. The methodology uses Merkle tree technology, enabling clients to cryptographically verify their own balances were included in the proof.

What makes this different from self-reported wallet snapshots is the combination of frequency, independence, and verifiability. Glover emphasized: “True transparency requires independent reporting, regular updates, and methodologies anyone can check. Clients shouldn’t have to take anyone’s word for it.”

Scale and Track Record

Ledn’s credibility here matters. Since 2018, the company has funded $10.2 billion in lifetime loans across 47,000 loan originations. Critically, the platform survived the 2022 lending crisis without incident—no collapse, no contagion, no frozen customer assets. It also weathered at least one bear market before that.

Recently, Ledn received a strategic investment from Tether, further validating its operational model. That capital came from a company that understands the importance of proof and transparency in a skeptical industry.

Setting a New Industry Baseline

As traditional financial institutions accelerate their entry into bitcoin-backed lending, Ledn’s framework is attempting to establish the proof standard that the industry should have adopted years ago. Before regulators mandate it, before another crisis forces a reckoning, the company is arguing that independent verification, regular disclosure, and real-time transparency are no longer optional—they’re essential infrastructure.

The legacy of 2022 wasn’t just financial loss; it was a loss of trust. Ledn is betting that demonstrating proof and accountability will become a competitive advantage in an institutional era of crypto lending.