Crypto lending after 2022: how institutional credit desks work now

A credit desk that lends against Bitcoin or Ether now has to answer three questions. Can the collateral be rehypothecated? Who holds it while the loan is outstanding? And what happens to the client's claim if the lender files for bankruptcy? The lenders that failed in 2022 answered those questions in their terms of use, or not at all. The court filings and regulatory actions that followed now shape how lending products are documented and structured.

What the court and regulatory record shows

Four centralised lenders filed for bankruptcy between July 2022 and January 2023: Celsius Network, Voyager Digital, BlockFi and Genesis Global Capital. The public record on each is narrower than the popular account, and what follows concerns the companies only.

Celsius filed for Chapter 11 in July 2022. On 4 January 2023 the US Bankruptcy Court for the Southern District of New York held that crypto deposited in Celsius's Earn programme was property of the bankruptcy estate. Under the terms of use, customers granted Celsius "all rights and title" to those assets, which Celsius could "lend, sell, pledge, hypothecate, assign, invest, use, commingle or otherwise dispose of". The decision did not determine who owned assets in the Custody Program, Withhold Accounts or Borrow Program.

Voyager Digital filed for Chapter 11 in July 2022, with approximately $1.3 billion of crypto assets on its platform in early July. After a proposed sale of its assets to Binance.US collapsed, the same court approved a plan of liquidation on 17 May 2023.

Regulators had already acted against BlockFi before its Chapter 11 filing in the District of New Jersey on 28 November 2022. On 14 February 2022 the SEC charged BlockFi Lending LLC with failing to register the offers and sales of its BlockFi Interest Accounts. The SEC also found that BlockFi had operated as an unregistered investment company, because it held more than 40% of its total assets, excluding cash, in investment securities. BlockFi agreed to pay $100 million, $50 million to the SEC and $50 million in fines to 32 states. It also agreed to stop offering those accounts to new US investors and said it intended to register a new lending product.

Genesis Global Capital suspended customer withdrawals in November 2022. It filed for Chapter 11 in the Southern District of New York on 19 January 2023, estimating its liabilities at between $1 billion and $10 billion. On 12 January 2023 the SEC had charged Genesis and Gemini over the unregistered offer and sale of securities through the Gemini Earn lending programme. Genesis settled for a $21 million penalty in March 2024, and the SEC receives none of it until other allowed claims in the bankruptcy have been paid.

The New York attorney general filed a civil suit on 19 October 2023. According to the attorney general, Genesis had not received audited financial statements from its borrower Three Arrows Capital for more than two years. At one point Alameda Research was the borrower on nearly 60% of Genesis's outstanding loans to third parties, and Genesis tried to conceal more than $1.1 billion in losses from its investors, from Gemini and from the public. These are allegations. Genesis settled on 20 May 2024 for $2 billion without admitting or denying them, and the settlement bans it from operating in New York. On 14 June 2024 Gemini agreed to return approximately $50 million in digital assets to Earn investors and accepted a ban on running a crypto lending programme in New York. The case against Digital Currency Group continues. On 11 April 2025 a judge dismissed two duplicative claims and denied the rest of its motion to dismiss. Nothing here is a finding against that company.

Collateral and margin terms now

Coinbase's quarterly filing for the period ending 30 June 2025 shows what a documented institutional lending book looks like. Coinbase reported $803.4 million in loan receivables. Against them it recognised $972.7 million in collateral it must return: 7,978 BTC, 36,750 ETH and $21.4 million in fiat. It also held $615.1 million in customer collateral that it did not recognise on its balance sheet. The filing states that collateral requirements for all outstanding loans ranged from 100% to 300% of the loan's fair value. It also reports that three counterparties each accounted for more than 10% of recognised loan receivables. This is the kind of concentration information that the Genesis complaint alleges its investors did not get.

Consumer products now publish their terms too. On 25 August 2026 Galaxy launched the GalaxyOne Crypto Portfolio Line of Credit at an 8.99% APR, secured against Bitcoin, Ether and Solana, including staked SOL, with no origination fee. According to The Block, the product does not rehypothecate collateral.

Rehypothecation and tri-party structures

Rehypothecation means a lender or custodian reuses collateral that a client has pledged, instead of holding it against the loan. Celsius's Earn terms did not hide this right. They expressly allowed Celsius to lend, pledge, hypothecate and commingle deposited assets. The bankruptcy court then treated the title transfer in those terms as decisive. A depositor could have read that language, but few would have understood what it meant in an insolvency.

Lenders have responded in two ways. Some now state a no-rehypothecation policy in the product terms, as Galaxy does. Others use tri-party arrangements, which limit reuse through how the account is set up. On 23 April 2026 Copper extended its ClearLoop service to collateral for OTC derivatives. Takers post margin to the dealer's ClearLoop account at Copper, where use of the assets is restricted. Margin can be rehypothecated only within the ClearLoop network of ten connected exchanges. The dealer holds a security interest, and the taker keeps ownership. That is a different legal position from the outright title transfer the court relied on in Celsius's case.

Segregation and bankruptcy treatment

If a lender fails, what happens to collateral depends on the contract and on the insolvency law that governs it. Calling an account "segregated" does not settle the question. How custody arrangements differ, and what they do and do not protect, is covered separately. For lending, Celsius shows that the title and reuse clauses in the agreement can decide whether collateral goes back to the client or into the general estate.

What regulators require, and what they do not

In the United States, the BlockFi and Genesis actions both treated interest-bearing crypto lending products as securities that had to be registered. There is still no enacted federal market-structure statute. The Digital Asset Market Clarity Act (H.R. 3633) passed the House on 17 July 2025. On 15 September 2026 a Senate cloture motion to proceed to the bill failed by 49 votes to 50, eleven short of the 60 required. The Crypto Times reported that opponents pointed to weak ethics safeguards, among other objections. The bill has passed only the House and is not law.

In the European Union, MiCA does not directly regulate crypto-asset lending, as its Recital 94 notes. The European Securities and Markets Authority confirmed this in Q&A 2883, published on 18 June 2026. A crypto-asset service provider may still offer lending, but MiCA's general obligations continue to apply to it. If it holds client crypto-assets, it may not use them for its own account. To lend them, it needs the client's prior express and specific consent on clearly defined terms, and general terms and conditions are not prominent enough to give that consent. Lending revenue must go to clients, less a fair and proportionate fee. Counterparty risk and the risk of a collateral shortfall must be disclosed. The Q&A is supervisory guidance on MiCA, which is already in force, and does not create a new lending regime. The European Commission has consulted on whether to add lending and borrowing as a regulated activity, with comments due by 31 August 2026. No proposal has followed yet.

DeFi lending, briefly

Onchain lending protocols run collateral valuation and liquidation in code, with no credit officer involved, and they bring risks of their own. Where DeFi lending yield comes from covers those risks, from smart contracts and oracles to the curators who choose where a vault lends.

At Proof of Talk's Paris 2026 edition, the programme included a panel on this subject, "Institutional Yield in Crypto: From Bitcoin Strategies to Onchain Vaults". It took place on the Taostats Stage on 2 June 2026, moderated by Travis Hayes, with panellists from Veda Labs, XBTO, Zircuit and CoinFund.

What this means for counterparty diligence

Given the 2022 record, a desk reviewing a lending counterparty or product can ask specific questions.

• Does the agreement set out a rehypothecation policy in its terms, or only in marketing?
• Does title pass to the lender, or does a named custodian hold the collateral under a tri-party or segregated structure?
• What loan-to-value range and margin-call trigger are written into the agreement?
• How concentrated is the counterparty's own loan book, and who discloses that concentration?
• Which insolvency law governs the claim, and what have courts done with digital assets under it?

Operational due diligence on digital asset managers covers related questions about custody and independent verification.

This is not tax, legal or investment advice.