TL;DR: If a crypto lender isn’t registered with the Canadian Securities Regulators (CSA), your Bitcoin or Ethereum could be frozen—or sold—overnight. Ledn may market to Canadians, but as of September 16, 2025, it has not received an exemptive-relief decision from the CSA. Readers can easily verify a company’s status via the CSA and its provincial regulators. Ours, for instance, is right here. ‍

Why this matters now

• Bitcoin and other popular crypto assets are up, and so is loan demand backed by these assets. More Canadians are unlocking liquidity without selling their stacks than ever before—and APX Lending is proof of that.  

• Ledn’s pitch looks enticing—especially the low-rate part—but the company operates in Canada without regulatory approval. In fact, they’re registered in the Cayman Islands, a safe haven for tax evaders and money launderers. Also, it’s where the infamous Ugland house is located, which U.S. President Barack Obama referred to as "the biggest tax scam in the world".

• Regulators have signaled in the past that they will shut down unregistered platforms—sometimes with zero notice. That’s all to say: be careful.  

Licensing 101: How crypto lending is regulated in Canada

1. Who’s in charge? The Canadian Securities Administrators (CSA) are a group of securities regulators who coordinate rules across provinces, enforced locally by bodies like the Ontario Securities Commission (OSC) and British Columbia Securities Commission (BCSC). In other words, when it comes to regulating securities in Canada, the CSA calls the shots.

2. Registration or Exemptive Relief. Crypto platforms must register as investment dealers—or file for exemptive relief—before serving Canadians.  

3. Staff Notice 21-333. Published in 2023, it bans margin or stablecoin leverage and forces tighter custody rules; crypto asset trading platforms (CTPs) had until October 31, 2024 to comply.  

The hidden dangers of unlicenced lenders

1. Regulatory shutdowns and frozen funds

• BCSC banned LiquiTrade Ltd., another Cayman Island platform, from operating in B.C., freezing user assets in the process.  

2. Insolvency chaos

• Celsius, a cautionary tale that most of us are familiar with, collapsed, locking up roughly $5 billion in customer deposits. Many are still fighting in bankruptcy court to recoup their losses and, sadly, many won’t.  

3. Multi-million-dollar fines

• BlockFi paid 100 million USD for offering unregistered lending products to consumers—then filed for bankruptcy months later.  

4. No CIPF/FDIC-style protection

• Unlike your chequing account, there’s no insurance backstop if an unlicenced lender goes bankrupt. When they disappear, so does your collateral. Not the kind of magic trick any of us want to experience.

5. Opaque terms and re-hypothecation

• Without regulatory oversight, lenders can lend out (or even invest) your collateral behind the scenes. A lender which operates under the purvue of regulators, on the other hand, has stringent guardrails in place that ensure they can’t play around with your collateral, under any circumstance.  

Case study: Ledn—great marketing, zero Canadian licence

Ledn proudly advertises “Bitcoin-backed loans” to Canadians, yet its name is missing from the CSA’s current list of authorized crypto trading platforms. Skeptical? Check for yourself.  

What that means for you

Related read: APX vs Ledn: compliance face-off

Canada’s regulatory crackdown is accelerating

• CSA and the Canadian Investment Regulatory Organization (CIRO) have warned that unregistered platforms must pursue full investment-dealer status.  

Due-diligence checklist: vet your crypto lender

1. CSA lookup: Use the CSA’s “Are they registered?” tool and search the firm’s name.

2. Ask for decision numbers: Legitimate platforms share their exemptive-relief file numbers publicly. here’s ours.

3. Asset segregation: Demand proof your collateral is held 1:1 in cold custody. APX, for instance, guarantees segregated and insured cold storage custody that’s visible on-chain 24/7 so you have real-time on-chain proof-of reserves.

4. Proof-of-reserves: Bi-annual or annual, third-party audits go stale the day they are published, and there’s nothing to give you comfort that a platform like Ledn, won’t go out and invest your collateral the day after an audit is complete. Look for real-time, on-chain visibility, which APX Lending provides. While third-party audits do provide assurance at a point in time, nothing beats live on-chain proof of reserves that you can scope in real-time whenever you wish.

5. Insurance and audits: SOC-2, crime insurance, and independent custody are must-haves.

Already borrowing from an unlicenced lender? Do this today

1. Lower your LTV—pay down the loan or top-up collateral.

2. Test withdrawals with a small amount.

3. Diversify: don’t keep all your coins with one platform, unless they can provide you with all the assurances noted above.

4. Monitor CSA bulletins for cease-trade orders.

5. Refinance with a licenced lender like APX before trouble hits.

What makes a licenced platform safer? (APX example)

• Regulatory approval: APX operates under CSA exemptive-relief.

• Segregated cold custody: Collateral stored with qualified custodians.

• Transparent LTVs and no re-hypothecation: We lend you funds against your Bitcoin; we never gamble with your Bitcoin.

Conclusion

Cheap rates are great—until they cost you your coins. If your lender isn’t registered in Canada, you’re one regulatory notice away from frozen funds and sleepless nights. Protect your collateral and your sanity: borrow from a platform that is a leader when it comes to compliant, safe and secure lending.