If an investor wants short-term cash but does not want to sell crypto holdings, a crypto-backed loan offers another route: post digital assets as collateral, borrow cash, and keep ownership of the coins. That is the core pitch in a paid Decrypt article centered on Figure’s crypto-backed loan product.
How the loan structure works
The article says borrowers can pledge Bitcoin, Ethereum, or Solana as collateral. In return, a lender advances cash, with Figure listing loan amounts of up to 75% of the collateral’s value. The borrower keeps ownership of the crypto during the life of the loan.
Because borrowing is not a sale, the piece says it generally does not create a capital-gains event, while also stressing that this is not tax advice and that borrowers should consult a professional about their own situation.
Four points the article says borrowers should compare
The write-up says the crypto-backed lending category has matured quickly and that lenders differ in meaningful ways. It highlights four factors for comparison.
Fixed versus variable rates
Some lenders advertise a low introductory rate that moves with the market. Figure’s crypto-backed loan is described as carrying a fixed rate for the full loan term, which means the payment does not change as markets move.
Regulation and licensing
The article points to the collapses of centralized crypto lenders in 2022 as a lesson for the market, arguing that a “crypto lender” is not the same thing as a “licensed lender.” It says Figure Lending LLC is a licensed lender under NMLS #1717824 and presents that status as a different risk profile from an unregulated offshore platform holding customer coins.
Funding speed and credit requirements
According to the article, Figure can fund loans the same day and does not require a credit score. Approval is based on collateral rather than a borrower’s FICO score.
Downside protection and liquidation terms
The piece says crypto volatility can trigger liquidation when prices fall sharply. Figure offers optional Liquidation Protection, available in select states, that defers price-based liquidation for the term of the loan so that a temporary market drop does not automatically force a sale.
It also states that liquidations will still occur if a loan becomes delinquent. The protection applies only to margin calls and liquidations tied to price declines, not to missed payments, defaults, or other violations of loan terms.
Who the article says the product may suit
The article says crypto-backed loans are not for everyone and adds that borrowers who would be highly stressed by a margin call may not view this as the right tool. For long-term holders who need liquidity without selling, it describes a fixed-rate, licensed loan as an efficient way to put crypto to work while keeping the position.
The promotional copy also says readers can learn more about Figure’s crypto-backed loan and earn $50 when they deposit $500.
Company information and New York notice
The article lists Figure Lending LLC dba Figure at 650 S. Tryon Street, 8th Floor, Charlotte, NC 28202, with phone number (888) 819-6388 and NMLS ID 1717824. It says licensing information is available at www.nmlsconsumeraccess.org and identifies the firm as an Equal Opportunity Lender.
It also states that the site is not authorized by the New York State Department of Financial Services and cannot facilitate mortgage solicitation activity or loan applications for properties located in New York through the site.
U.S. availability and risk disclosures
Crypto loans are offered to U.S. borrowers by Figure Lending LLC, according to the article, but the product is not available to U.S. residents of DC, ID, IL, KY, MD, MS, SD, TX, VT, or VA.
Before opening an account, customers are told to read the relevant risk disclosure statements on the company’s disclosures page. The article warns that system access, order placement, and execution may be delayed or fail because of market volatility and trading volume, quote delays, software or system errors, internet traffic, outages, and other factors.
It also says investing in cryptocurrencies involves significant risks and that cryptocurrency trading is not available in New York, with a separate prompt to review risk disclosures related to investing and trading in cryptocurrencies.
Figure Payments Corporation disclosures
The article says Figure Payments Corporation provides cryptocurrency services for self-directed investors and traders. It states that the company is neither licensed with the U.S. Securities and Exchange Commission nor the Commodity Futures Trading Commission, and that it is not a member of the National Futures Association.
Figure Payments Corporation is listed with NMLS ID 2033432 at 100 West Liberty Street, Suite 600, Reno, NV 89501. The article says its licensing status can be verified through the NMLS Consumer Access website and includes a reference to Figure Crypto’s state license and regulatory disclosures.
New York and international jurisdictions
The article says crypto loans are offered through Figure Markets Credit LLC to residents of New York state 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, and Zimbabwe.
Rates, APR, fees, and the sample loan
The article discloses a maximum APR of 12.62%, noting that APR includes interest and applicable fees such as a 1% origination fee.
Available rates listed for Figure’s crypto-backed loan are 8.91% interest, or 9.999% APR, at 50% LTV, and 11.50% interest, or 12.62% APR, for loans up to 75% LTV. The repayment period is 12 months.
A representative example in the article shows a borrower taking a $10,000 crypto-backed loan at 50% LTV for 12 months with an 8.91% interest rate and a 1% origination fee, equal to $100, for an APR of 9.999%. In that example, the borrower receives $10,000 and makes 12 monthly payments of $74.25.
The article adds that rates are higher for applications secured by assets with a higher LTV ratio. It says the Figure crypto-backed loan uses a 12-month interest-only repayment term and allows a maximum initial LTV ratio of 75%. Interest rates change frequently, so the exact rate depends on the application date and may depend on multiple factors, including LTV ratio.
Liquidation protection states and tax note
The optional liquidation protection is available only in CA, NY, FL, PA, AL, AK, GA, HI, MA, and UT, according to the article.
On taxes, the piece says crypto borrowing is generally non-taxable, but liquidation triggers an IRS taxable sale. It again says that this is not tax advice and that readers should consult a CPA.
Paid endorsement disclosure
The article ends by stating that it is a paid endorsement by Figure Technology Solutions, Inc. It says the information should not be construed as an offer to sell securities or a solicitation of an offer to buy securities, and advises readers to consult a financial advisor before making decisions.