Institutional Bitcoin lenders are ditching DeFi complexity for TradFi-style transparency!

Executives from Two Prime, Ledn, and Lygos Finance told Consensus 2026 in Miami that institutional borrowers are moving decisively away from complex DeFi lending structures — and demanding custody transparency, standardized contracts, and identifiable counterparties instead. The shift is a direct consequence of the 2022 collapses of Celsius, Voyager, and BlockFi, where opaque leverage and aggressive rehypothecation triggered a sector-wide credit crisis.

Two Prime CEO Alexander Blume captured the institutional mindset bluntly: "The moment you start trying to explain how any of this stuff works, they're just like, No... We'll pay more. Don't lose my money." Ledn co-founder Adam Reeds echoed the custody concern, calling the single most important question in any deal "where is your Bitcoin stored."

Lygos Finance CEO Jay Patel said borrowers now need to "underwrite the lender" themselves,…