Summary
- Crypto-backed loans allow holders to obtain cash using their cryptocurrencies as collateral, which typically avoids triggering capital gains taxes.
- When evaluating options, Figure recommends considering four key factors: maximum loan-to-value ratio, fixed versus variable interest rates, regulatory compliance, and liquidation conditions.
- According to the crypto lender, the regulatory status and liquidation safeguards are often more crucial than just the interest rate, and this financing option is best suited for those comfortable with the risks of margin calls.
If you trust the long-term potential of your cryptocurrencies, selling them to manage short-term cash needs is generally not an attractive option. By opting for a crypto-backed loan, you can secure cash against your assets while retaining ownership of your coins.
The process is straightforward: you use assets like Bitcoin, Ethereum, or Solana as collateral, and a lender provides you with cash—up to 75% of the collateral's value* through Figure. You maintain full ownership of your cryptocurrency throughout the loan's duration. Since borrowing does not equate to selling, it usually does not trigger a capital gains event (note: consult a tax professional for personalized advice).
This sector has rapidly evolved, and not all lending platforms are created equal. Here are four critical aspects to consider when searching for the ideal crypto-backed loan:
Interest Rates: Fixed vs. Variable. Some lenders may advertise low introductory rates that fluctuate with market conditions. Figure's loans, however, feature a fixed rate* for the entire loan duration, ensuring your payment remains stable regardless of market volatility.
Regulatory Compliance. The collapses of several centralized finance (CeFi) lenders in 2022 highlighted the importance of differentiation between "crypto lenders" and "licensed lenders." Figure Lending LLC is a licensed lender (NMLS #1717824), which presents a significantly different risk profile compared to unregulated offshore platforms that may hold your assets.
Quick Access Without Credit Checks. Figure offers same-day funding and does not require a credit score; approval hinges solely on the value of your collateral, not your credit history.
Protection Against Downside Risk. Given the volatility of cryptocurrencies, a sudden drop in value could lead to liquidation. Figure provides an optional Liquidation Protection** (available in certain states) that postpones liquidation based on price fluctuations throughout the loan term, helping to prevent forced sales during market downturns.
While interest rates are important, they are the least protective factor when market volatility arises. The lender's regulatory standing and the liquidation terms** are what truly safeguard you from unwanted asset sales. Therefore, when comparing loans, assess all four aspects: maximum loan-to-value ratio, interest rate type, regulatory compliance, and collateral management in adverse market conditions.
Crypto-backed loans may not be suitable for everyone—those who fear margin calls may want to reconsider. However, for long-term investors seeking liquidity without the need to sell, a fixed-rate*, fully licensed loan can be one of the most effective methods to leverage your crypto assets while retaining them.
Discover more about Figure's crypto-backed loan and earn $50 when you deposit $500.
Disclaimer
©2026 Figure Lending LLC
Figure Lending LLC dba Figure 650 S. Tryon Street, 8th Floor, Charlotte, NC 28202. (888) 819-6388. NMLS ID 1717824. For licensing information go to www.nmlsconsumeraccess.org Equal Opportunity Lender.
This site is not authorized by the New York State Department of Financial Services. No mortgage solicitation activity or loan applications for properties located in the State of New York can be facilitated through this site.
Crypto-Backed Loan Availability (Only in select jurisdictions):
Crypto loans are available to U.S. borrowers via Figure Lending LLC. This product is not accessible to residents of DC, ID, IL, KY, MD, MS, SD, TX, VT, or VA.
©2026 Figure Markets 650 California, Suite 200 San Francisco CA 94108. For general customer support related to the Figure Markets platform, call (888) 851-4883
Before opening an account, customers should review the relevant risk disclosure statements on our Disclosures page. System access and trade placement may experience delays or failures due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages, and other factors.
Investing in cryptocurrencies carries significant risks. Cryptocurrency trading is not permitted in NY. Please click here for risk disclosures related to cryptocurrency investing and trading.
Figure Payments Corporation provides self-directed investors and traders with cryptocurrency services. It is neither licensed by the SEC or the CFTC nor is it a member of NFA. Figure Payments Corporation's NMLS ID is 2033432, located at 100 West Liberty Street, Suite 600, Reno, NV., 89501. You can verify Figure Payments licensing status at the NMLS Consumer Access website. Click here for Figure Crypto's state license and regulatory disclosures.
Crypto loans are offered through Figure Markets Credit LLC to New York residents and to international customers, except in the following jurisdictions: Crimea (Ukraine), Donetsk (Ukraine), Luhansk (Ukraine), Afghanistan, Albania, Belarus, Central African Republic, Congo (the Democratic Republic), Cuba, Ethiopia, Haiti, Iran (Islamic Republic of), Iraq, Lebanon, Libya, Mali, Myanmar (Burma), Nicaragua, Nigeria, North Korea (Democratic People's Republic of), Pakistan, Palestine (State of), Russia, Somalia, South Sudan, Sudan, Syria, Ukraine, Venezuela, Yemen, or Zimbabwe.
*Maximum APR: 12.62% APR (APR includes interest plus applicable fees such as the 1% origination fee). Interest rates for Figure's Crypto-Backed Loan are 8.91% (9.999% APR) at 50% LTV or 11.50% (12.62% APR) for up to 75%. The repayment term is 12 months.
Representative Example (Total Cost): For instance, a borrower might take a Crypto Backed Loan at a 50% LTV of $10,000 for 12 months, with an interest rate of 8.91% and a 1% origination fee of $100, resulting in an APR of 9.999%. In this scenario, the borrower receives $10,000 and will make 12 monthly payments of $74.25. Rates may be higher for applications secured by assets with a greater LTV ratio. The Figure Crypto-Backed Loan features a 12-month interest-only repayment period and allows for a maximum initial LTV ratio of 75%. Interest rates fluctuate, so your specific rate will depend on your application date and various factors such as LTV ratio.
** Liquidations may still occur if the loan becomes delinquent. Liquidation Protection is applicable only to margin calls and liquidations due to price declines, not to missed payments, defaults, or violations of loan terms. Liquidation protection is exclusively available in CA, NY, FL, PA, AL, AK, GA, HI, MA, UT. More details about liquidation protection can be found here.
While borrowing against crypto is generally not taxable, liquidation can trigger a taxable event with the IRS. This is not tax advice; please consult with a CPA.
Paid endorsement by Figure Technology Solutions, Inc. The information contained herein should not be interpreted as an offer to sell or a solicitation to buy any securities. Consult a financial advisor before making any decisions.
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