Tag: Blockfi

BlockFi to Raise Interest Rates on Crypto Deposits, despite Encounter Bear Market

by Blockchain News

BlockFi, a major crypto lending platform based in New Jersey, announced last Friday that it would increase deposit rates across several cryptocurrencies starting from July 1.

The crypto lender said it would lower withdrawal fees on various cryptocurrencies. Additionally, the firm also stated it will end a policy that allows one free withdrawal per month. All these policies start taking effect on July 1.

BlockFi stated the reason for increasing interest rates comes from its ongoing mission to offer substantial and long-term customer service while expanding its product offerings, as well as a changing macro yield environment and decreasing market competition.

The crypto lender said it would increase deposit rates for BTC, ETH, USDC, GUSD, PAX, BUSD, and USDT in its BlockFi Interest Account (BIA) beginning next month. The firm also said it would reduce fees for withdrawing BTC, ETH, and stablecoins starting from July 1 as well.

Interest rates are normally set based on the market trends for lending and borrowing assets. The company said all prices shown on its rate dashboard are current; therefore, the new rates will be effective at the start of next month.

BlockFi further mentioned that the rates on cryptocurrencies held in its BIA accounts are basically driven by institutional demand for borrowing assets.

Apart from the increased interest rates, the firm further said it is changing its withdrawal structure effective July 1 because of high withdrawal demands.

The company stated it will scrap a policy allowing one-free monthly withdrawal for BTC, ETH, and stablecoins. The firm also said it will lower all those assets’ withdrawal fees.

BlockFi said it has accommodated the new withdrawal structure based on the current market downtrend. Therefore customers are expected to pay a maximum of $25 for transaction fees, depending on the asset.

The latest announcements by BlockFi come after the lender had secured a $250 million loan from FTX exchange and laid off 20% of its employees to improve its finances.

On Wednesday, BlockFi announced that it received a $250 million line of credit from FTX a day after Sam Bankman-Fried, FTX CEO, said that the exchange would bail out other struggling crypto firms.

Meanwhile, other related reports indicate that FTX is in talks to acquire a stake in BlockFi. According to Reuters, no equity agreement has yet been reached, and discussions are ongoing.

Last week, BlockFi joined many crypto firms hit by the current dramatic market downturn. BlockFi announced massive job cuts to weather the ongoing crypto winter.

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Voyager Digital Secures $200m Credit Facility to Meet Liquidity Demands

by Blockchain News

The need to be more adequately equipped for the current crypto winter has pushed Voyager Digital Holdings, a prominent crypto trading and investment platform, to secure more than $200 million in credit facility from Alameda Ventures.

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As announced by the firm, the loan includes $200 million in cash, a USDC revolver, and a 15,000 BTC.

The loan, per the conditions given by Alameda Ventures, can be accessed in tranches of $75 million every 30 days. Voyager Digital will only request these funds if its position at any point demands that the funds should be drawn. While Voyager claims it has minimal liquidity at hand, it said the move to secure the credit facility was intended to safeguard its customer’s assets.

The negative outlook of the digital currency ecosystem has weighed on many crypto platforms, including Celsius Network and Babel Finance. 

While both have halted withdrawals and are searching for a proactive solution to surmount current liquidity pressures, Babel Finance, per an earlier Blockchain.News reported said it has asked its creditors to grant it some time to repay. 

While it has paid Compound Finance $10 million in the form of DAI stablecoin, Celsius Network has generally asked for more time to sort its operational modalities, a move it is making while consulting with restructuring experts.

The impacts of the current crypto winter are becoming real by the day, and other prominent lenders like BlockFi have also taken the initiative to seek a credit facility. BlockFi, which laid off about 20% of its global workforce, recently said it has secured a $250 million credit facility from FTX Derivatives Exchange.

Amongst the major firms that are being impacted by the current meltdown is Three Arrows Capital, and Voyager Digital said it is amongst its debtors and will be exploring legal options to recover its funds from the embattled venture capital firm in the case of a default that is slated to be triggered by June 27.

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BlockFi Lands $250m Credit Facility from FTX Derivatives Exchange

by Blockchain News

BlockFi, in exploring avenues to leave the league of the most distressed cryptocurrency lending platforms around, has got a $250 million credit facility from FTX Derivatives Exchange. 

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Announced on Tuesday by BlockFi CEO Zac Prince, the company is now on track to bolster its balance sheet and general platform strength. The utilization of the new credit facility will be primarily centred on being deployed as a contractually subordinate capital to “all client balances across all account types (BIA, BPY & loan collateral)”, with Zac promising that the funds “will be used as needed.”

FTX’s latest action is described as a rescue mission in restoring the confidence of the recent crash of the crypto market. Over the past few weeks, the market was being challenging for digital currency asset providers, particularly crypto lenders. Celsius Network halted its withdrawals and virtually all of its core operations and said that it would need more time to resume its operations recently. In its efforts to resolve its current woes, Celsius has started repaying its outstanding loans, sending $10 million in DAI stablecoin to Compound.

While BlockFi’s woes are not as pronounced as Celsius Network’s or Babel Finance’s, the firm has unveiled plans to cut operational costs by laying off 20% of its workforce. Zac commented on the secured credit facility and said the funds would bolster its working relationship and collaboration with FTX.

“Throughout the market volatility of the last several weeks, I’m incredibly proud of how our team, platform, and risk management protocols have performed. Today’s landmark announcement reinforces BlockFi’s commitment to serving its clients and ensuring their funds are safeguarded,” Zac said in the tweet, “This agreement also unlocks future collaboration and innovation between BlockFi & FTX as we work to accelerate prosperity worldwide through crypto financial services. This is a significant step forward in our commitment to the strength and accessibility of crypto markets.”

Zac reiterated BlockFi’s commitment to its customers adding that it will also weather this current storm as it has always done.

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Crypto.Com, BlockFi Announce Massive Layoffs as Economic Crisis Bites

by Blockchain News

Crypto exchange Crypto.com and lending platform BlockFi announced on Monday plans to cut over 400 jobs globally, as they come under pressure from difficult market conditions.  

Crypto.com said that it would reduce its workforce by 5%, that is about 260 employees. CEO Kris Marszalek disclosed the announcement via Twitter social media: “Our approach is to stay focused on executing against our roadmap and optimizing for profitability as we do so … That means making difficult and necessary decisions to ensure continued and sustainable growth for the long term by making targeted reductions of approximately 260, or 5%, of our corporate workforce.”

Meanwhile, BlockFi also announced on Monday that it is laying off 20% of its workforce, which is around 170 people. Zac Prince, BlockFi CEO, said in a tweet Monday that the crypto lending firm is reducing its “headcount by roughly 20% and the reduction impacts every team at the company. This decision was driven by market conditions that have had a negative impact on our growth rate and a rigorous review of our strategic priorities.”

Recession Fears

Crypto.com and BlockFi have followed a series of various crypto firms faced with massive layoffs. Late last month, Bitso, one of the biggest crypto exchanges in Latin America, laid off 80 employees due to the recent downturn in the crypto market. Last month, Buenbit, an Argentina-based cryptocurrency exchange, also cut its workforce by 45%.

Earlier this month, Coinbase announced a freeze of its hiring for the foreseeable future and withdrew a number of accepted offers in order to deal with current macroeconomic conditions. Early this month, Bahrain-based crypto exchange Rain Financial Inc and Latin America’s largest crypto exchange 2TM also laid off over a dozen employees as digital asset markets remain red.

Crypto market is experiencing bad days as value of the digital assets plunged below $1 trillion on Monday, triggered by the announcement by Crypto lender Celsius Network that it paused all withdrawals and transfers between accounts, citing “extreme market conditions.”

The latest crypto crash marked the first time since January 2021 when the Bitcoin price fell to a low of $23,750 and the cryptocurrency market has reached as low as $926 billion, according to data site CoinMarketCap. In November 2021, the global crypto market peaked at $2.9 trillion but has been seeing a steady decline this year.

In the past two months, investors have dumped riskier assets amid high inflation and fears that interest rate raises by central banks will hamper growth. Extreme market conditions and central banks’ policy updates are exacerbating the consequences for digital assets.

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BlockFi Records Data Breach on Hubspot of its Third-Party Vendor

by Blockchain News

BlockFi, an American cryptocurrency platform to buy, sell and earn crypto, has confirmed that some of its client’s data stored on Hubspot, a Customer Relationship Management platform, have been compromised.

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Taking to Twitter to announce the incident, BlockFi said the compromised data were limited to name, email addresses, and phone numbers.

BlockFi said it proactively informs its affected clients of the incident, which is suspected to be tilted toward a phishing attack before the bad actors will attempt to utilize the stolen data. The investigation regarding the hack is still ongoing. The platform confirmed that it does not store the most sensitive data, including BlockFi’s account and its passwords, information of government-issued ID cards, and social security numbers on Hubspot; hence these are safe.

In a bid to allay all fears, BlockFi confirmed that no user’s funds were stolen as the breach remains only with Hubspot. The platform advised its users to beware of emails sent with a demand in urgency to change passwords and the likes. The company asked its users to implement additional safeguards to improve their accounts’ security.

As part of the recommendations BlockFi gave is the activation of Two-Factor Authenticator (2FA), the permission of the platform’s ‘Allowlisting’ feature places withdrawal on at least a 7-day hold should a new address be listed for withdrawal. The platform said this can significantly protect its clients from being exploited by bad actors.

In whatever format they come, hacking or protocol breaches are not uncommon in the digital currency ecosystem, especially amongst cryptocurrency exchanges and Decentralized Finance (DeFi) platforms. Earlier this year, Singapore-based Crypto.com suffered the first major crypto exchange breach for the year as far back as January. This incident impacted about 400 accounts with more than $34 million lost.

Per the BlockFi-Hubspot breach, the platform said continuous collaborations would be advanced, and affected clients would be updated about discoveries in the near term.

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BlockFi to Pay $100M to Settle Charges with SEC & 32 States

by Blockchain News

BlockFi will pay $100 million to the U.S. Securities and Exchange Commission (SEC) and 32 states to settle charges in connection with a retail crypto lending product.

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The charges have come after a subsidiary of BlockFi offered the retail crypto lending product to nearly 600,000 investors, regulators said.

The penalty is the largest fine the federal watchdog has levied on an issuer of crypto-asset securities, and it includes $50 million for state regulators and $50 million to the SEC.

The SEC added that the charges are lower than they might have been due to BlockFi’s willingness to cooperate.

BlockFi Lending LLC is paying the heavy fine as it broke the rules by offering an interest-bearing lending product without registering it with regulators.

The company and its affiliates held about $10.4 billion in assets from investors – nearly 400,000 in the United States – as of Dec 8, the SEC said.

According to Reuters, the charges come as U.S. regulators, worried about investor protections and systemic risks, are cracking down on the booming crypto industry. 

Also, the settlement is an example of SEC chair Gary Gensler’s strategy to force crypto firms to comply with existing U.S. securities laws, Reuters added.

The agency said it hopes more companies will follow suit.

BlockFi was also alleged by the North American Securities Administrators Association (NASAA), which coordinated the multi-state probe, of failing to comply with similar state registration rules. The NASAA said that more jurisdictions are expected to join the settlement.

In reply to the settlements, BlockFi said the resolution is an example of the firm’s “pioneering efforts in securing regulatory clarity for the broader industry and our clients.”

Following the case, BlockFi has planned to offer an alternative product expected to be the first crypto interest-bearing security registered with the SEC.

In recent years, the SEC has been keeping a closer look at crypto exchanges and lenders as the agency is working on bringing the digital asset sector within the existing regulatory framework.

According to Reuters, crypto lending products, in particular, have become an SEC target. In September, Coinbase Global Inc said the agency was threatening to sue if it went ahead with plans to offer a similar product.

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BlockFi Co-Founder Sees Huge Growth And FOMO For Crypto In 2022

by NEWSBTC

Co-founder of BlockFi and senior vice president of operations, Flori Marquez, shared the company’s insight on collected customers’ data and shed some light on the crypto industry’s growth as they have seen “huge moves” of Americans interested in it, suggesting a burgeoning adoption.

During an interview with Yahoo Finance, Flori Marquez shared some interesting numbers. In the year over year Bitcoin returned 112%, and compared to gold and S&P respectively, she said, “that’s a negative 4% and 24%.”

So, year over year, it has been volatile in the last 30 days. But it’s still a great investment for people who were participating a year ago.

Marquez claims this year was big for crypto in terms of mainstream consumer demand, which took BlockFi to research amongst customers’ data to try understand their sentiment on Bitcoin at the moment.

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we’ve seen that 1 in 10 people plan to gift crypto this year. And also, about 2/3 of Americans prefer to talk about crypto versus if you think about five years ago, only 1% of people had ever traded crypto, and 50% of Americans had never heard of crypto five years ago.

BlockFi has around 75,000 clients using their Visa Signature Credit Card which offers rewards in Bitcoin, “And that’s absolutely huge because most fintech companies look to see about 10,000 credit cards in their first year” Marquez added and further suggested that Americans are highly interested in earning “different types of awards”, but not necessarily looking forward to earn cash back.

BlockFi’s co-founder claims that 2/3 of their clients “actually spend less with cash back” since starting to use their Bitcoin-rewards cards because they are “more into crypto”. Their clients nowadays show a long-term ‘hodlers’ way of thinking, and see BTC as an asset that could generate them an important yearly return that cash cannot offer.

when they receive a Bitcoin reward, they’re not selling that for cash. So the upside isn’t necessarily the $140 that you’re receiving in Bitcoin today. The upside is what could that Bitcoin be worth a year from now.

A Chainalysis research shows that, by October 2021, the goblal crypto adoption had grown over 2300% since Q3 2019 and over 881% in the last year as many countries face devaluations and citizens all over the world want to protect their savings, and there is also a large boost coming from institutional investment. The total market cap of crypto reached $3 trillion in 2021 and is currently at $2,2 trillion.

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Crypto total market cap at $2,2 trillion in the daily chart | Source: TradingView.com

Related Reading | Has The NFT Bubble Popped? Prices Down 65% While Ecologists Sharpen Knives

BlockFi Sees The Growth Of Crypto Driven By FOMO

During 2022, Marquez expects to see more first timers American customers enter the crypto space as she thinks that “a huge driver is going to be FOMO”, meaning that the industry is getting so popular –and cash is looking less useful– that people do not want to miss out on the possible returns.

Reading | FOMO Beware: Spot Bitcoin Buying Volume Remains Low, Despite New ATH

For Marquez, this Holiday season could incentivize the FOMO as many are talking about their 2021 investments and how they worked out. “I do think that crypto has become a bit more digestible for the average consumer than it was five years ago”, she claims.

Furthermore, Marquez thinks that crypto will keep seeing new talent come in, people who have changed paths trying to find a “right fit” for the long-term during the pandemic. She claimed there will be more “shifting from other more traditional industries into crypto and the fintech sector”, and thinks that’s a new opportunity to bring in historically excluded demographics.

As many others do, Marquez hopes to see some regulatory clarity for crypto next year, and commented that “BlockFi is a huge believer in partnership with regulators” to achieve building a bridge that connects traditional finance with crypto. She suggested clarity would boost the mainstream adoption because users will think the space is safer if regulators are in it.

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FOMO will drive crypto adoption in 2022, says BlockFi co-founder

by Cointelegraph

Flori Marquez, the co-founder of cryptocurrency custodian BlockFi, says that upwards price action, new talent and regulatory clarity combine to create a bubbling FOMO atmosphere for crypto adoption in 2022. In an interview with Yahoo on Dec. 19, Marquez also shared insights regarding industry growth in 2021.

While the number go-up technology of Bitcoin (BTC) remains the honey that draws in new adopters, Marquez suggests that crypto has become ‘more digestible’ for the average consumer than it was back in 2016. She explains that other significant drivers for growth in 2022 will be the wealth of skilled experts coming to work in the crypto industry and regulatory clarity.

The stats she cited set an optimistic foundation for growth in 2022. According to BlockFi research, one in ten people plan to gift crypto this year. Also:

“About two-thirds of Americans prefer to talk about crypto versus if you think about five years ago, only 1% of people had ever traded crypto, and 50% of Americans had never heard of crypto five years ago.”

BlockFi’s internal metrics are also indicative of burgeoning adoption. In the first year of their reward card’s operations, 75,000 signed up. Marquez points out that the figure is “absolutely huge because most fintech companies look to see about 10,000 credit cards in their first year.”

More interesting for FOMO in 2022 is the revelation that for the “majority of Blockfi’s clients–when they receive a BTC reward, they’re not selling that for cash.”

Related: Robinhood enables US users to gift crypto for the holidays

These discoveries reflect broader adoption trends across the crypto space, particularly among younger people. A recent CNBC survey revealed that 83% of millennial millionaires now own crypto. ‘Hodling’ is catching on, as similar to BlockFi’s clients, 38% plan to hold, and only 6% plan to reduce their crypto exposure in the coming year.

For Marquez, however, it’s the festive timing of new regulations and new talent coming into the crypto space that is pivotal. She comments that crypto and fintech have been huge attractors to people that are looking to learn something new and expand their careers.

“So I think we’re going to see more talent shifting from other more traditional industries into crypto and the fintech sector. And the last thing that I think we’ll see in 2022 is some regulatory clarity.”

As families come together during the holiday season with the Bitcoin price holding steady above $48k, a deep-seated, long-awaited FOMO atmosphere could drive both prices and adoption in 2022.