How Bitcoin loan collateral is held: Ledn vs Unchained

Unchained’s described model fits borrowers seeking a borrower-held key and a provider that says it does not lend or rehypothecate loan collateral. Ledn permits collateral re-posting under stated protections and describes reporting and proof-of-reserves checks. The decision turns on permitted collateral use, key control and what you can verify, not visibility alone. Unchained source · Ledn source

How Bitcoin loan collateral is held: Ledn vs Unchained

The comparison below uses the providers’ descriptions, read on 2026-11-09. Treat these as a starting point for reviewing your proposed loan agreement, not a substitute for it.

Collateral use changes the decision

Ledn’s permission to re-post collateral is a material distinction. A borrower considering that model should ask how its stated protections apply to the proposed loan, who may receive the collateral and what happens if that funding relationship ends.

Unchained’s stated position is different: it does not lend or rehypothecate loan collateral. Rehypothecation means using pledged collateral again to support another financing arrangement. Its shared-key structure also means no party can move the collateral alone, according to its loan page.

That does not make a borrower-held key equivalent to sole control. Do not treat participation in signing as permission to withdraw collateral whenever you choose. The agreement’s repayment, collateral-release and enforcement provisions still need review.

Verification should match the question

Ledn’s reporting and client balance check address a different verification task from Unchained’s borrower-key and address-based model. Neither should be reduced to a generic claim that collateral is “transparent.”

For Ledn, the relevant distinction is between checking a reported balance and understanding permitted collateral use. For Unchained, it is between verifying Bitcoin at an address and understanding who can authorize its movement. On-chain visibility does not establish legal protection, and a published collateral-use policy should be checked against the proposed agreement.

For related comparisons, use the Bitcoin lender directory and custody provider directory.

Questions to ask before signing

Send each lender the same written questions and request answers tied to your proposed agreement:

• Who holds each key, and which parties can authorize a collateral transfer?
• May collateral leave its initial address or be pledged to another party? Who may receive it, and which protections and contractual limits apply?
• What can I verify directly, and what depends on a report or assurance from someone else? Can you demonstrate the process and explain its scope?
• What happens to collateral during repayment, a margin call, default or a service interruption?
• What fees and operational steps apply before collateral is released? Can you provide an itemized fee schedule?

Before transferring Bitcoin, identify the agreement clauses covering custody, permitted use and release, and resolve any differences between those terms and the provider’s written answers.

Frequently asked questions

Can Ledn re-post my Bitcoin collateral?

Ledn says collateral may be re-posted to an institutional USD funding partner or a Ledn-sponsored financing vehicle under stated protections. Ask how those protections and permissions apply to your proposed agreement. Source

Does Unchained lend out Bitcoin backing its loans?

Unchained says it does not lend or rehypothecate Bitcoin backing its loans. Compare that statement with the permitted-use provisions in your loan agreement. Source

Does holding an Unchained borrower key let me withdraw collateral alone?

No. Unchained says no party can move the collateral acting alone, so a borrower-held key should not be treated as unilateral withdrawal control. Source

How do the collateral checks differ?

Ledn describes reporting and periodic independent proof of reserves with a client balance check. Unchained describes on-chain verification using a borrower-controlled key; review both the verification process and the contract rather than treating either check as legal protection. Ledn source · Unchained source