Crypto lending startup Ledn to acquire Arxnovum to expand into asset investing

The transaction is expected to close in the fourth quarter of this year.

Crypto lending startup Ledn has reached an agreement to acquire fellow Toronto-based Arxnovum Investments, a regulated digital asset investment manager.

Upon completion of the transaction, which is expected to take place in the fourth quarter of this year, Arxnovum would represent Ledn’s first acquisition. Financial terms of the transaction were not disclosed.

“Recent industry turmoil has underscored that not all digital asset lenders are created equal and that regulation is key to building trust and transparency among customers.”
– Adam Reeds, CEO of Ledn

Ledn previously told BetaKit in August that he was actively exploring merger and acquisition opportunities as turbulent economic conditions hit the crypto market. At one point, Ledn was involved with a group that sought to invest in struggling BlockFi.

Although the BlockFi deal did not go through as BlockFi agreed to be acquired by FTX instead, Ledn co-founder and chief strategy officer Mauricio Di Bartolomeo said the drop in valuations of the cryptography and slowing VC funding could provide Ledn with the opportunity to buy “a great product, team [or] certain licenses” at a more affordable price.

The acquisition of Arxnovum by Ledn should allow the first to offer investment products in digital assets to its customers in Canada and elsewhere.

Created last year by Shaun Cumby, Arxvnovum operates as a cryptocurrency investment manager that offers active and passive strategies for investors to gain exposure to digital assets. It offers funds for Bitcoin, Ethereum, Decentralized Finance Index and crypto.

Arxnovum is registered with certain securities regulatory authorities in Canada as an investment fund manager, portfolio manager, commodity trading manager and exempt market dealer. Under Ledn, Arxnovum will operate as an independent business unit.

Founded in 2018 by Di Bartolomeo and CEO Adam Reeds, Ledn offers Bitcoin and USDC savings accounts, as well as Bitcoin-backed loans to customers in over 100 countries (USDC is a digital stablecoin pegged to the US dollar) .

According to Reeds, the current turmoil in the crypto industry has underscored that not all digital asset lenders are “created equal” and that regulation is key to building trust and transparency among customers.

RELATED: As Other Lenders Crash, Ledn Bets Conservative Approach Will Help Startup Survive Crypto Winter

Celsius is one such crypto company that was caught in the middle of the crypto market crash. The New Jersey-based crypto lending company made headlines in June after it froze the accounts of its nearly two million users at the time, citing “extreme market conditions.” It sparked an investigation by regulators in Alabama, Kentucky, New Jersey, Texas and Washington.

Since then, a number of Celsius executives have resigned, including its CEO Alex Mashinsky as well as co-founder and chief strategy officer Daniel Leon. Celsius filed for bankruptcy in July.

“While many of our peers have recently suffered losses, Ledn continues to drive growth, becoming a global leader in digital asset financial services, including lending and savings products,” Reeds said as Ledn announced the Arxnovum deal.

Last year, Ledn raised $102.7 million in three rounds. In 2021, the startup announced a $2.7 million seed round in February, $30 million in Series A funding in May, and $70 million in Series B funding in December.

With the integration of Arxnovum, Reeds added that Ledn would become the first digital asset lender to offer yield fund products under exempt market broker registration.

“It will also allow us to provide more investment opportunities to accredited clients in markets that recognize Canadian securities regulations, to increase their holdings of digital assets,” he said.

Image courtesy of Ledn.

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