Crypto-backed loans allow holders to unlock liquidity using their digital assets without the need to sell. A wide ecosystem of crypto-native lenders has emerged in recent years — including DeFi protocols, centralized exchanges, and purpose-built credit infrastructure blockchains — meaning the options available to borrowers are greater than ever before. 

We’ve reviewed a wide sample of the top crypto lending platforms, and scored them on cost, accessibility, usability, trust, and security. Here’s a breakdown of what we found.

1. Figure

Best for: Regulatory-compliant U.S. crypto loans.

Figure developed its own purpose-built Layer 1 network called Provenance, designed for regulated financial institutions and tokenized/blockchain-native Real-World Assets (RWAs). Headquartered in the United States, the platform operates within U.S. financial regulations, placing it among the leading fintech firms for regulated crypto-backed lending.

The platform offers fixed-rate crypto-backed loans, as well as variable-rate loans through its decentralized lending marketplace, Democratized Prime. Figure’s crypto loans allow users to pledge supported digital assets and receive cash, with some of the highest loan-to-value ratios for crypto collateral. No credit score is needed for these crypto-backed loans^**, and approvals are typically extremely fast.

The platform also offers Liquidation Protection^* and decentralized Multi-party Computation (MPC) to custody a borrower's collateral. This means any Figure borrower is not exposed to the failure of a centralized custodian and can view their encumbered collateral in segregated self-custody wallets, visible onchain at all times. Alongside lending, Figure also offers cryptocurrency trading, blockchain-native securities infrastructure, and yield-bearing digital products on Democratized Prime.

As a company, Figure is known for its flagship Home Equity Line of Credit (HELOC), which allows U.S. homeowners to borrow against the equity in their homes. The Provenance blockchain streamlines loan origination, servicing, and secondary-market settlement. These loans can then be bought and sold on its onchain secondary loan marketplace, Figure Connect, which currently does over $1 billion in monthly loan volume. This efficiency means Figure can service smaller loans that may not be viable for traditional lenders. To date, the company has issued over $25 billion in HELOC volume.¹

2. Nexo

Best for: Experienced crypto users managing a diversified portfolio.

Nexo is a digital wealth platform headquartered in Switzerland, offering crypto-backed credit, trading, yield products, a crypto card, and institutional services. Users can trade, borrow, and earn interest on digital assets from a single account. 

One of Nexo's biggest differentiators is the breadth of assets it supports. Borrowers can pledge dozens of cryptocurrencies as collateral while receiving either local fiat currencies or stablecoins. However, its best crypto loan rates are reserved for NEXO token holders. Beyond borrowing, Nexo also offers flexible savings, fixed-term savings and Dual Investment products, 

Following a 2026 relaunch, Nexo products are once again available in the U.S. (excluding the state of New York) after a previous withdrawal. Its lending and wealth products are likewise widely available across much of Europe, Latin America, Asia and other international markets.

3. Ledn

Best for: Bitcoin-only borrowers.

Ledn is a bitcoin-focused crypto lending platform founded in 2018. Headquartered in the Cayman Islands, the company has grown into one of the largest specialist crypto lenders. Ledn has deliberately positioned itself as a conservative lender, stressing that collateral posted for loans is never rehypothecated or lent out to generate additional yield.

That platform focuses on only bitcoin loans, having discontinued support for other assets. Loans are managed through a web dashboard, with borrowers able to monitor collateral levels, make repayments, or add collateral if markets decline. One of Ledn's flagship products is its bitcoin-backed mortgage. Rather than selling bitcoin to purchase property, qualifying users can pledge BTC as collateral alongside the property itself. 

Although its dollar loan services are available globally, Ledn has withdrawn from some jurisdictions. This includes suspending new retail lending in several U.S. states (CA, CT, HI, NV, ND, SD, TN, WA, and DC). 

4. Aave 

Best for: DeFi-native power users.

Aave is the largest decentralized lending protocol in the industry, and the only DeFi loan platform on our list. Rather than matching individual users, the platform operates a series of onchain liquidity pools into which lenders deposit assets. Borrowers can then take out overcollateralized loans directly from those pools, with interest rates adjusting automatically according to supply and demand.

Aave’s smart contracts are deployed across multiple blockchains, including Ethereum, Arbitrum, Base, Avalanche, Optimism, Polygon, and others. It also supports dozens of collateral and loan assets, each with its own maximum loan-to-value ratio and liquidation threshold. 

Aave is governed by the Aave DAO, with AAVE token holders voting on protocol upgrades, supported assets, risk parameters, and treasury management. As such, it is not a regulated financial institution. Although the platform is available globally with no KYC, geoblocks are in place for U.S. users to comply with local regulations.

5. Coinbase

Best for: Beginners and existing Coinbase customers

Coinbase Borrow offers a simple and streamlined lending process, nested within the wider Coinbase ecosystem. Users pledge crypto assets as collateral, receive USDC directly into their Coinbase account, and can repay the loan at any time without fixed repayment schedules.

The current version of Coinbase’s crypto lending platform is built on top of Morpho, a decentralized protocol deployed on Base. While the lending infrastructure operates on DeFi rails, the entire user experience remains inside Coinbase's app. Users never interact directly with smart contracts or DeFi wallets, making the experience similar to a traditional centralized lending platform.

From a security perspective, Coinbase remains one of the strongest custodians in the industry. Most customer assets are held in geographically distributed cold storage, while online systems are protected through hardware security modules and multi-party security controls. 

Coinbase USDC loans are available to users in the U.K. and U.S. (barring the state of New York).

What are the different types of crypto lending platforms?

Crypto loan providers can be broadly classified into two categories: centralized finance (CeFi) and decentralized finance (DeFi).

• Centralized Finance (CeFi): With a CeFi loan, a centralized crypto lending platform issues the loan assets and holds the collateral. Typically these issuers will work with qualified third-party custodians, who handle licensing, compliance, and all other requirements related to the custody of the underlying collateral.
• Decentralized Finance (DeFi): DeFi loans are peer-to-peer loans utilizing smart contracts to connect lenders and borrowers. Lenders deposit funds into liquidity pools, while borrowers post collateral to take loans out of the pool. Liquidations are handled automatically by the smart contracts.

Generally, CeFi crypto lending platforms are a better option for beginners, as they offer simple interfaces and stronger security assurances. DeFi platforms offer a greater level of control, but introduce extra risks via smart contract vulnerabilities and unexpected liquidations.

Some platforms combine elements of both. For example, Figure features decentralized custody, using MPC technology to allow assets to be held onchain with key shards split between multiple node providers. This avoids relying on a single source of failure, as found in typical CeFi models.

How to Choose the Best Crypto Loan Platform

The best crypto loan platform for you will depend on your priorities as a borrower. Before taking out a loan, compare providers across these key criteria rather than focusing on interest rates alone:

• Security: Look for platforms with a strong security record, reputable custodians, and independent audits where possible.
• Compliance: Centralized lenders operating under recognised regulatory frameworks may offer greater transparency and consumer protections.
• Collateral support: Some lenders only accept bitcoin as collateral, while others support dozens of cryptocurrencies or even real-world assets such as residential property.
• Initial LTV: A higher maximum LTV allows you to borrow more against your collateral, but also increases the likelihood of liquidation if your collateral falls in value. 
• Costs: Compare borrowing rates, repayment flexibility, and any additional fees before committing to a platform. The best platforms offer crypto-backed loans with no hidden fees.
• Features: Beginner users will likely want to stay within a familiar ecosystem with strong guardrails, while power users may prefer the advanced control offered by DeFi protocols.

The top platforms for crypto-backed loans offer a balance of usability, security, and flexibility. 

What are the risks of crypto-backed loans?

Although the crypto lending sector is much more mature today than in past years, there are still some concerns that borrowers should be aware of.

• Liquidation: If the LTV ratio of a loan hits the liquidation threshold — meaning the value of the collateral is no longer sufficient relative to the loan size — then the lending platform can liquidate the position. This risk is especially pertinent to DeFi, where volatile asset prices and limited customer support mean liquidations can be quick and unexpected. Some platforms have inbuilt risk management tools, such as Figure’s Liquidation Protection^*, which protects borrowers from margin calls or liquidations related to price movement.
• Counterparty Risk: CeFi platforms hold onto user funds, or entrust a dedicated custodian with doing so. A security breach, bankruptcy, or fund mismanagement at either of these entities could put user funds at risk.
• Smart Contract Risk: Although the lack of a middleman removes counterparty risk for DeFi protocols, they’re subject to additional risks surrounding the code they’re built from. A poorly coded smart contract could be exploited by an attacker to steal funds.
• Regulatory Uncertainty: Regulators are increasingly embracing crypto, and platforms such as Figure and Coinbase operate within strong compliance frameworks. However, crypto market regulation could be subject to further revisions and restrictions in future.
• Insurance Limitations: In the U.S., crypto deposits are not insured by the FDIC, meaning your assets are not protected by the federal government in the event of a platform failure. Private insurance policies can fill the gap, but the coverage offered can vary.

Key Crypto Loan Terminology

• Annual Percentage Rate (APR): This figure represents the interest that the borrower must pay on the loan. For example, a $10,000 loan with a 5% APR means they’ll pay an additional $500 per year in interest. 
• Collateral: This is the asset posted by the borrower to secure the loan. For example, if a user deposits BTC into a protocol and takes out a USDC loan, the bitcoin is the collateral. 
• Custodian: An entity tasked with safeguarding the collateral posted by borrowers. This can be the issuer themselves, or a third-party specialist such as Coinbase Custody.
• Loan-to-Value (LTV) Ratio: The percentage of your collateral's value that you can borrow. For example, if a borrower posts $100,000 of bitcoin to secure a loan with an initial LTV of 50%, their maximum loan size is $50,000. If the value of the collateral falls while the loan is active, the LTV rises.
• Liquidation: If the LTV ratio of a loan hits a certain threshold determined by the issuer (86% on Coinbase, for example), they may then sell off the collateral. A partial liquidation sees them sell off only a portion, while a total liquidation closes the entire position.
• Margin Call: If the LTV ratio of a loan is approaching the liquidation level, the borrower will receive an alert. This gives them time to repay the loan, or deposit additional collateral to bring the LTV down to a safe level.
• Multi-Party Computation (MPC) Custody: MPC custody splits a private key into independent shards, eliminating single points of failure. Firms utilizing MPC Custody, such as Figure, do not act as a custodian of the borrower's crypto but provide the technology for a borrower to encumber their own crypto in a decentralized MPC self-custody segregated wallet while it serves as collateral for a CBL. MPC custody is designed to prevent any single point of failure or counterparty risk associated with traditional custodial models.
• Rehypothecation: In simple terms, this is when lenders take the collateral posted by customers and use it to generate additional yield, often by pledging it as collateral for their own loans. Although this practice can bring down costs for borrowers, it introduces another significant layer of risk.

FAQ

1. How do crypto loans work?

A borrower deposits their crypto assets as collateral, and borrows a portion of their value in another asset (such as USD or USDC) in return. When they repay the loan, their crypto is returned to them.

2. Can I lose my crypto when taking out a loan?
Yes, it’s possible. If a borrower is unable to repay their loan, or maintain enough collateral to keep their LTV ratio below the liquidation threshold, then their collateral can be sold off by the crypto lending platform to cover the cost.

3. What are crypto loans backed by?

Crypto loans can be backed by a wide range of assets: BTC, ETH, XRP, stablecoins, and more. All of these assets are blockchain-native digital assets which can be liquidated instantly if a LTV liquidation threshold is breached.

4. What can crypto-backed loans be used for?

Borrowers use crypto-backed loans to secure access to liquid capital without the need to sell their assets. The reasons for doing so can vary: covering a house purchase, funding a business, or even rotating capital into other asset classes without having to sell any crypto. 

5. Can I repay a crypto loan early?

Generally, yes. Most of the best crypto loan platforms allow you to repay your loan early with no additional fees.

6. Which crypto lending platforms offer the safest loans?

No loan is entirely without risk. However, the safest crypto loan platforms are generally those which operate within a robust regulatory framework, maintain strong risk management practices, and refrain from taking undue risks with borrowers’ collateral. 

7. Are crypto loans taxed?

In the United States, taking out a crypto loan is not a taxable event as no assets are being disposed of. However, if your collateral is liquidated then you will likely be subject to capital gains tax. These guidelines vary widely across other jurisdictions and each borrower is encouraged to seek their own tax advice.

8. Can I get a crypto loan with a bad credit rating?

Crypto-backed loan issuers generally don’t perform credit checks, as the loan is secured by the collateral. However, RWA-backed loan providers may perform checks to comply with local regulations.

9. Do crypto loans affect your credit score?

Crypto-backed loans generally do not affect credit scores. However, RWA-backed loan platforms may report repayment activity depending on the jurisdiction and loan type.

10. Do I need to pass KYC to get a crypto loan?

On CeFi crypto lending platforms, KYC is a strict prerequisite. Most DeFi platforms do not enforce KYC checks, but may restrict access based on location for some users.

This article is sponsored by Figure Technology Solutions Inc. and is for general information, discussion, or educational purposes only and is not to be construed or relied upon as constituting legal, financial, investment, accounting, tax, estate-planning, or other professional advice or recommendation. Please read Figure Markets’ full Risk Disclosure Statement and Disclaimers.

This post is commissioned and does not serve as a testimonial or endorsement by The Block. This post is for informational purposes only and should not be relied upon as a basis for investment, tax, legal or other advice. You should conduct your own research and consult independent counsel and advisors on the matters discussed within this post. Past performance of any asset is not indicative of future results.

1. https://www.mpamag.com/us/specialty/non-qualified-mortgage-loan/the-big-interview-what-figures-acquisition-of-kiavi-means-for-mortgage-brokers/579264 

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**Approval may be granted in five minutes but is ultimately subject to verification of income and employment, as well as verification that your property is in at least average condition with a property condition report. Five business day funding timeline assumes closing the loan with our remote online notary, and where loan amounts are under $400,000 which would not require an appraisal. Funding timelines may be longer for loans secured by properties located in counties that do not permit recording of e-signatures or that otherwise require an in-person closing, or that require a waiting period prior to closing, or where loan amounts exceed $400,000.

Digital currency is not legal tender, is not backed by the government, and BIA accounts are not subject to FDIC or SIPC protections.

Availability: Crypto loans are offered to U.S. borrowers by Figure Lending LLC. This product is not available to U.S. residents of DC, ID, IL, KY, MD, MS, SD, TX, VT, or VA.

Crypto loans are offered through Figure Markets Credit LLC to residents of the state of New York and to international customers except in the following jurisdictions: Crimea (Ukraine), Donetsk (Ukraine), Luhansk (Ukraine), Afghanistan, Albania, Belarus, Central African Republic, Congo (the Democratic Republic), Cuba, Ethiopia, Haiti, Iran (Islamic Republic of), Iraq, Lebanon, Libya, Mali, Myanmar (Burma), Nicaragua, Nigeria, North Korea (Democratic People's Republic of), Pakistan, Palestine (State of), Russia, Somalia, South Sudan, Sudan, Syria, Ukraine, Venezuela, Yemen, or Zimbabwe.

Lender & Licensing: Figure Markets Credit LLC. 650 S. Tryon Street, 8th Floor, Charlotte, NC 28202. (888) 926-6259. NMLS ID 2559612. For licensing information, go to www.nmlsconsumeraccess.org  Opens in a new window.. Figure Lending is not affiliated with Figure Markets Holdings, Inc., Figure Technologies, LLC or any of its subsidiaries.

2. Crypto Loans start at a minimum of $5,000, subject to state and jurisdiction-specific legal limitations. Your loan amount will ultimately depend on the amount of collateral in your account and your eligibility will be determined by your state or jurisdiction of residence, credit profile, and other personal information available at the time of your application.

General minimum and maximum loan amounts may vary subject to state-specific legal limitations.

Repayment Period (Minimum-Maximum): 12 months

3. Maximum APR: 12.62% APR (APR includes interest plus applicable fees such as the 1% origination fee). Available interest rates for Figure's Crypto-Backed Loan are 8.91% (9.999% APR) at 50% LTV or 11.50% (12.62% APR) up to 75%.

Representative Example (Total Cost): As an example, a borrower receives a Crypto Backed Loan at 50% LTV of $10,000 for a term of 12 months, with an interest rate of 8.91% and a 1% origination fee of $100, for an APR of 9.999%. In this example, the borrower will receive $10,000 and will make 12 monthly payments of $74.25. Rates will be higher for applications secured by assets with a higher LTV ratio. The Figure Crypto-Backed Loan has a 12 month interest-only repayment term and allows for a maximum initial LTV ratio of 75%. Interest rates change frequently so your exact interest rate will depend on the date you apply and may depend on many factors such as LTV ratio.

Obtaining a crypto-backed loan generally does not trigger an upfront taxable event. Tax treatment may vary based on individual circumstances. Consult your tax advisor.

*Liquidation protection is only available in CA, NY, FL, PA, AL, AK, GA, HI, MA, UT. Liquidations will still occur if the loan becomes delinquent. More information about liquidation protection can be found here. The Figure Crypto Backed Loan (CBL) allows eligible users to borrow U.S. dollars secured by crypto collateral. The maximum loan-to-value (“LTV”) ratio is 50% at origination.

Approval is not guaranteed.