Please note that BlockFi filed bankruptcy in November 2022 and its products and services are no longer available to new customers.
BlockFi is a cryptocurrency lending platform offering simple crypto-backed loans and savings accounts. While there are decentralized alternatives out there, BlockFi accounts are insured and the platform follows strict safety compliance measures.
If you’re wondering how BlockFi loans improve your financial life, the key point to realize is BlockFi enables you to borrow money without selling your crypto. Before BlockFi, you might have had to sell some crypto to cover other expenses or investments.
Now, you can keep your crypto, earn interest using BlockFi’s lending products, and borrow cash with your Bitcoin, Ethereum, Litecoin, or stablecoins.
Yes, BlockFi is a Legit Company
Crypto is a fairly new frontier disrupting finance as we know it. So, while companies like BlockFi may not be as familiar names as Google, Amazon, and Square, they are part of a new class of crypto tech companies on the rise.
Unlike some of the shadier parts of the crypto industry full of anonymous teams and complicated apps, BlockFi is a legit company built by a deeply experienced team. Moreover, it’s backed by massive amounts of venture capital funding, with it’s latest round garnering $350 million at a whopping $3 billion valuation.
The excitement around BlockFi stems from the more than $10 billion in loans originated on the platform. What makes retail and institutional clientele comfortable lending and borrowing crypto and cash using BlockFi? Simply put, BlockFi is a safe crypto loan platform featuring crypto custody and insurance provided by the Gemini Trust Company, an NYDFS-regulated exchange.
Along with a select group of legit cryptocurrency companies led by Coinbase, BlockFi is taking the decentralized finance industry mainstream.
1. Can I Buy Crypto on BlockFi?
BlockFi is a crypto loan platform for earning interest with Bitcoin and other cryptocurrencies as well as taking out crypto-backed loans. As such, you can’t buy cryptocurrency directly on BlockFi as you would on an exchange, but there are two options for indirectly buying crypto with BlockFi:
- Borrow funds using BlockFi to buy other cryptocurrencies.
- Deposit funds on BlockFi to borrow another crypto asset.
While the second option isn’t the same as buying crypto, it does mimic a margin long position taken on a crypto exchange.
2. Which Coins Does BlockFi Support?
BlockFi currently supports deposits for 10 cryptocurrencies ranging from tokens to stablecoins. Using any of the supported cryptocurrency assets below, you can take out a crypto-backed cash loan.
You can currently deposit BTC, ETH, LTC, LINK, USDT, USDC, BUSD, GUSD, PAX, and PAXG.
3. How Much Interest Does BlockFi Charge for a Loan?
Taking out a cash loan using Bitcoin or other cryptocurrencies using BlockFi is inexpensive from an interest standpoint. The lower your LTV ratio (loan to value ratio) is, the less interest you pay for your crypto-backed loan.
BlockFi borrow interest rates begin 4.5% for 20% LTV ratio, 7.9% for 35% LTV ratio, and 9.75% for 50% LTV ratio. So, the more you borrow against a fixed amount, the higher your interest rate is.
4. How Much Interest Can I Earn with a BlockFi Interest Account?
Earning interest with a BlockFi Interest Account, or BIA, is easy to do and generates hefty returns compared with traditional bank offerings.
Stablecoins such as USDT, USDC, BUSD, GUSD, and PAX earn between 8.6% and 9.3% APY, while cryptocurrencies like BTC, ETH, and LINK between 5.25% and 6% APY.
5. How Do I Withdraw Money From BlockFi?
To withdraw money from BlockFi, you must submit a withdrawal request before 5PM EST for a one-day turnaround, or after 5PM EST for a two-day turnaround time.
Withdraw requests are processed during business hours (9:30AM through 5PM EST) Monday through Friday. The purpose of the withdrawal request period is to clear a security hold and ensure your funds’ safety.
6. How Long Do BlockFi Withdrawals Take?
Withdrawal requests on BlockFi take between 1-2 business days to process during business hours Monday through Friday.
7. How Long Do BlockFi Deposits Take?
When depositing cryptocurrency assets to the BlockFi platform, deposits are normally processed and available immediately after the blockchain’s confirmation period. Depending on the blockchain, this time frame can range between minutes and hours.
If you deposit cash using an ACH wire transfer, deposits are subject to a 2-3 day transit period before being made available in your account.
8. Is BlockFi a U.S. Company?
BlockFi is a legit company based in the U.S., and has physical offices in both New York City, NY, and Jersey City, NJ.
9. Does BlockFi Report to the IRS?
BlockFi reports to the IRS and also makes it easy for you to report your BlockFi activity to the IRS with tax forms 1099-MISC and 8949.
10. Who is Behind BlockFi?
BlockFi was founded in 2017 by Zac Prince and Flori Marquez in Jersey City, New Jersey. The BlockFi leadership team features a who’s-who among ex-Fortune 500 and banking executives providing a wealth of experience to the startup.
11. How Secure is BlockFi?
BlockFi has originated over $10 billion in loans to both retail and institutional clients alike without incident.
Apart from its stellar security history, BlockFi uses the Gemini Trust Company to custody its crypto assets in cold storage under regulatory compliance with the NYDFS.
12. What Happens If BlockFi Gets Hacked?
Because BlockFi does not hold the private keys to assets under cold storage with Gemini, a hack of the BlockFi platform is unlikely to result in lost funds. Instead, a BlockFi hack will probably result in exposed account details such as names and emails addresses.
However, BlockFi’s custodian, Gemini Trust Company, is fully insured by Aon, a large multinational insurance provider with over $10 billion yearly revenue.
13. Is BlockFi a Crypto Wallet?
BlockFi Interest Account, or BIA, is a crypto wallet that earns interest on Bitcoin, Ethereum, Litecoin, Link, USDT, USDC, GUSD, BUSD, PAX, and PAXG.
Unlike a normal crypto wallet, the BlockFi Interest Account is not for use in sending transactions between wallets, but is instead used for earning passive income with crypto.
See If BlockFi is Right For You
If you are looking for a simple account for earning passive income with your cryptocurrency assets or a way to take out a cash loan without selling your crypto, BlockFi is a good fit.
Unlike decentralized crypto loan platforms, BlockFi will custody your assets securely using Gemini, an NYDFS-regulated exchange and custodian backed by Aon insurance. With safety features like these in place, BlockFi is the perfect crypto lending platform for users who value safety, security, and a legit company under full lawful compliance.
