Crypto lender Ledn looks to work with regulators following asset manager acquisition

Quick Take

  • Ledn acquired Arxnovum to grow its product offerings, namely to register its yield products with Canadian regulators, the firm’s CEO told The Block in an interview.
  • The crypto lender had explored the possibility of other acquisitions in the summer, being linked with a bid for rival lender BlockFi at one point. 

Ledn has acquired digital asset manager Arxnovum as the crypto lender looks to scale its product suite.

The Canadian-based crypto lender made the announcement Thursday, with the acquisition set to be completed by the end of 2022, subject to regulatory approval. After completing the transaction Arxnovum will become Ledn Asset Management Inc.

The acquisition opens the door for Ledn to register its yield products in Canada, CEO Adam Reeds told The Block in an interview. 

Arxnovum, founded last year, operates as a digital asset manager, and it applied for approval for a bitcoin ETF in January 2021 that has yet to launch. The firm is registered with several securities regulators in Canada as an investment fund manager, portfolio manager, commodity trading manager, and exempt market dealer.

Ledn was introduced to Shaun Cumby, founder and chief executive of Arxnovum, through the firm's counsel, Lori Stein of McCarthy Tetrault in Toronto. Cumby previously worked at 3iQ, an investment fund manager that made inroads with the Ontario Securities Commission (OSC) with its bitcoin fund, which trades on the Toronto Stock Exchange (TSX).

Arxnovum's track record of working with regulators is something Ledn wants to emulate, Reeds told The Block. Gaining regulatory approval in Canada is significant beyond the country's borders, Reeds contended, and the nature of the regulatory environment there means other regulators hold approvals from Canadian regulators in high regard.

Ledn was linked to an acquisition of rival crypto lender BlockFi in the summer. At the time  Reeds told The Block the firm's "operational strength" meant it was evaluating a number of opportunities to broaden its leadership in digital asset lending and beyond.

The Arxnovum deal is the latest high-profile crypto acquisition in Canada, coming after CoinSquare announced its acquisition of fellow crypto trading platform CoinSmart. The planned acquisition and integration will see Coinsquare manage over CAD$350 million (approx. $258 million).


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