What is BlockFi?
BlockFi is a blockchain-based wealth management platform offering crypto-backed loans and interest-bearing accounts. Users can lend their crypto assets to earn passive income or borrow funds by using their holdings as collateral. The platform emphasizes flexibility, allowing borrowers to retain ownership of their crypto assets after repaying their loans.
Key Features:
- Crypto Loans: Borrow USD against Bitcoin (BTC), Ethereum (ETH), or Litecoin (LTC) collateral.
- Interest Accounts: Earn monthly compounding interest (up to 6.2% APY) on crypto deposits.
- Trading: Zero-fee trading between BTC, ETH, LTC, and stablecoins.
- Institutional Services: Tailored solutions for large-scale investors.
Who’s Behind BlockFi?
Founded in 2017 by Zac Prince and Flori Marquez, BlockFi is headquartered in Jersey City, New Jersey. The company has secured over $60 million in funding from prominent investors, including:
- Galaxy Digital (Mike Novogratz)
- Morgan Creek Capital
- Winklevoss Capital
- Coinbase Ventures
Leadership Team:
- Zac Prince (CEO): Former business development lead at Orchard Platform.
- Flori Marquez (VP of Operations): Managed a $125M portfolio at Bond Street (acquired by Goldman Sachs).
- Rene Van Kesteren (Chief Risk Officer): Ex-Managing Director at Bank of America Merrill Lynch.
BlockFi Products
1. Crypto-Backed Loans
How It Works:
- Deposit BTC, ETH, or LTC as collateral.
- Borrow up to 50% of the asset’s value (Loan-to-Value/LTV).
- Interest rates start at 4.5% with a 12-month term.
Eligibility:
- Minimum collateral: $15,000 in crypto.
- No credit checks (loans don’t affect credit scores).
Advantages:
- Avoid capital gains taxes by not selling crypto.
- Flexible repayment: Interest-only monthly payments with no prepayment penalties.
2. BlockFi Interest Account (BIA)
Earn Interest:
- 6.2% APY on BTC (0.5–25 BTC) and ETH (25–250 ETH).
- Balances above limits earn 2%.
Withdrawals:
- 1 free withdrawal/month; subsequent fees apply (e.g., 0.0025 BTC).
Supported Assets:
- BTC, ETH, LTC, GUSD (Gemini Dollar), USDC.
3. Trading
- Zero-fee trades between supported cryptocurrencies.
- Instant conversions (e.g., GUSD interest to BTC).
Security & Regulation
- Custodian: Funds held by Gemini, a NYDFS-regulated trust.
- Insurance: Gemini provides $100M custodial insurance.
- Compliance: SOC 2 Type 1 certified (audited by Deloitte).
Safety Measures:
- Cold Storage: 95% of assets offline.
- 2FA & Biometric Login: Enhanced account security.
Pros & Cons
Pros ✅
- High-interest rates (6.2% APY).
- No credit checks for loans.
- Tax-efficient liquidity.
- Institutional-grade security.
Cons ❌
- Centralized (not DeFi).
- Limited free withdrawals.
- Interest rates adjustable monthly.
FAQs
1. Is BlockFi safe?
Yes. Funds are custodied by Gemini, which is SOC 2 compliant and insured.
2. What happens if crypto prices drop?
If collateral value dips below LTV thresholds, borrowers must top up funds or face liquidation after a 72-hour notice.
3. Can I earn interest in stablecoins?
Yes! Use Interest Payment Flex to receive payouts in GUSD/USDC instead of BTC/ETH.
👉 Explore BlockFi’s interest accounts
Final Verdict
BlockFi is ideal for crypto holders seeking passive income or liquidity without selling assets. While centralized, its robust security and regulatory compliance make it a top choice for U.S.-based investors.