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Crypto lending has faced significant setbacks, with major lenders such as Celsius, Voyager, and BlockFi filing for Chapter 11 bankruptcy and facing lawsuits from regulators and customers. Despite these challenges, analysts suggest that certain lending models—particularly those using crypto as collateral and operating with conservative risk controls—may persist, while the sector awaits clearer regulatory guidance. Unchained Capital, which offers Bitcoin‑backed loans with low loan‑to‑value ratios and does not rehypothecate collateral, exemplifies a more cautious approach that could survive the current environment.
Celsius, Voyager, and BlockFi filed for Chapter 11 bankruptcy and are subject to lawsuits from the New York Attorney General and the SEC.
Analysts believe that crypto lending can continue if it adopts more conservative practices and operates under clearer regulations.
Lending models that use cryptocurrency as collateral, such as those offered by Coinbase, Unchained Capital, Salt Lending, Nexo, and Binance, are considered more likely to survive.
Unchanged Capital serves about 4,000 customers, offers loans at 14‑15% interest, and does not rehypothecate Bitcoin collateral.
Regulators have flagged the practice of labeling crypto deposits as high‑interest savings accounts as potentially violating securities laws.
They faced insolvency after market crashes reduced the value of deposited crypto, leading to liquidation challenges and regulatory lawsuits.
Lending that uses digital assets as collateral with conservative loan‑to‑value ratios, such as the model used by Unchained Capital, is seen as more likely to survive.
Clients retain control of their Bitcoin private keys, and the collateral is held in a segregated vault with no rehypothecation, only moved in liquidation events.
The SEC has sued platforms like BlockFi, Genesis Global Capital, and Gemini for offering unregistered securities, and regulators criticize labeling crypto deposits as savings accounts.
Analysts say that clearer rules and enforcement are needed for lenders to market products responsibly and regain investor confidence.
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