When you pledge your coins as collateral or put them to work in Earn, one question matters most: how safe are they? Safety in a crypto loan has several layers — custody, how price swings are handled, and the communication that comes before any action is even considered. We explain how Trade Lend handles each layer, and which risk still stays with you.
Key takeaways
- Your pledged coins are held under institutional-grade custody architecture and operational security practices, and are locked for the duration of the loan.
- If the loan-to-value rises, we notify you multiple times. Any collateral action is always manual, reviewed and announced — never automatic.
- The Earn rate is defined, but the price risk of the underlying coin stays with you: a guaranteed rate is not a guaranteed value.
The short answer
Your coins remain your property. With a crypto loan they are not sold but locked as collateral for the term and released once the loan is fully repaid. The biggest risk is not losing your coins to the platform but volatility — the swing in market value. That is exactly why there is a loan-to-value framework with a safety buffer and a clear chain of communication before anything happens.
- Custody
- The technical and organisational safekeeping of your coins during the term. Trade Lend describes it as institutional-grade custody architecture and operational security practices.
- Loan-to-value (LTV)
- The ratio of the loan amount to the market value of your collateral. A low LTV means more buffer; a high LTV means less room when prices fall.
- Price risk
- The risk that the market value of your coins falls. It always stays with you — whether you borrow or earn interest.
How your coins are held
As soon as you pledge coins as collateral, they are locked for the duration of the loan. During this time you cannot freely dispose of them, but they remain your property. As long as you keep to the agreed terms, your collateral stays untouched and is released once the loan is fully repaid.
Our custody, without the marketing
We describe our approach as institutional-grade custody architecture and operational security practices. We deliberately name no specific custodian, bank, insurer or partner — and make no guarantees we cannot prove. That restraint is part of our seriousness, not the opposite of it.Security is also a matter of access control: sensitive operations are tied to authorised, logged people, and the attack surface is kept deliberately small. How we handle your data and access is set out in our privacy policy.
The LTV framework: buffer and warning tiers
The loan-to-value (LTV) is the central safety instrument. It determines how much buffer sits between your loan and the market value of your coins. Trade Lend uses a tiered framework, so at each tier there is time and room to act.
| Tier | LTV | Meaning |
|---|---|---|
| Standard | up to 50% | A comfortable starting value with a large buffer against price swings. |
| Warning | from 60% | The buffer shrinks. We notify you so you can respond. |
| High risk / maximum | up to 70% | The highest permitted loan-to-value — e.g. up to 70% for Bitcoin. Little room if the price keeps falling. |
If the loan-to-value rises beyond these tiers, into the region of around 80 to 85 percent, we proactively reach out to find a joint solution — for example additional collateral or a partial repayment. You can enlarge the buffer yourself at any time by pledging more coins or repaying part of the loan. More on this in our guide to loan-to-value.
No automatic sell-off
This is the most important point and the clearest difference from many automated protocols: at Trade Lend there is no automatic, instant or silent sell-off of your coins.
Our principle on collateral
We prioritize communication and provide multiple notifications before any manual collateral action is considered.In concrete terms: any action on your collateral is manual, reviewed and accompanied by advance notice. A sale is a last resort and only comes into consideration after a prolonged breach toward around 95 percent — and even then only after communication. There is no algorithm that sells your coins without warning.
The price risk remains
However careful the custody and communication are, one risk we cannot take off your shoulders: price risk. The market value of Bitcoin, Ether and other coins can rise or fall at any time. If it falls sharply, additional collateral or a partial repayment may be needed to stay within the framework.
To be honest
Neither a loan nor the Earn program protects against price losses in the underlying asset. If you are not willing to bear price risk, a crypto loan may be the wrong solution for you. Whether borrowing or selling makes more sense for you is examined in our article crypto loan or sell.Safety in the Earn program
In the Earn program, your coins also remain your property and are withdrawable on request. The rate is clearly defined: the flexible plan offers 2.5% p.a. variable, the fixed plan 3% p.a., guaranteed for the first twelve months and a fair market rate thereafter. Interest is credited daily in the same coin and reinvested automatically.
The distinction matters: the rate is guaranteed, the price value of the coin is not. A guaranteed 3% rate means your coin holdings grow — not that their value in euros or US dollars rises. If the coin’s market price falls, your value can fall despite the interest credited. So the asset’s price risk remains here too.
What you can contribute yourself
Safety is also a matter of your own preparation. These points help you stay in control:
- Start with a low loan-to-value to keep a larger buffer against price swings.
- Respond promptly to our notifications when the LTV rises.
- Keep additional coins ready so you can top up collateral quickly if needed.
- Use repayment, which is possible at any time with no prepayment penalty, to actively manage the buffer.
Want to work through the loan-to-value for your coins? Use the loan calculator, open a position in the portal, or bring any open questions straight to our team.
Frequently asked questions
No. We prioritize communication and provide multiple notifications before any manual collateral action is considered. There is no automatic or silent sale. If the loan-to-value rises, we notify you; around 80 to 85 percent we proactively reach out to find a joint solution.
Your coins are held under institutional-grade custody architecture and operational security practices and are locked for the duration of the loan. We deliberately name no specific providers. As long as you keep to the terms, your collateral stays untouched and is released once the loan is fully repaid.
Up to 50 percent of market value by default. A warning tier applies from 60 percent, and 70 percent is the high-risk and maximum limit — for Bitcoin, borrowing up to 70 percent is possible. A lower starting value creates a larger buffer against price swings.
The rate is defined — flexible 2.5% p.a. variable, fixed 3% p.a. guaranteed for the first twelve months, then a fair market rate. However, the price of the underlying coin can still rise or fall. A guaranteed rate is not a guaranteed value in euros or US dollars; the asset price risk remains.
Once the loan is fully repaid, your pledged coins are released and fully available to you again. Repayment is possible at any time with no prepayment penalty; interest accrues daily.
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Continue reading
What Is a Crypto Loan? Definition, Collateral and Risks
Pledge your coins as collateral instead of selling them: how a crypto loan works, how the amount is calculated, what the risks are — with a glossary, a worked example and an FAQ.
Earn: Fixed or Flexible? Which Plan Fits You
Fixed or flexible? The fixed plan gives a rate guaranteed for 12 months, the flexible plan full availability. Both pay daily in the same coin. The comparison with a clear decision guide.
This article is for general information only and does not constitute investment, legal or tax advice. Crypto loans carry risks, including price fluctuations of the collateral.