In the last decade, we have witnessed the rise of crypto as an alternative currency with real-world utility, which has attracted the attention of many developers and investors. As crypto has grown in popularity and cryptocurrencies, we’ve also witnessed many successful businesses which have made a name for themselves within the market.
This is what happens for BlockFi, an organization that is described as “the future of finance,” which lets you get loans secured by collateral and earn interest from your cryptocurrency.
According to the website, BlockFi is a way for institutions and individuals to hold and invest in cryptocurrency and earn money. If you are looking to get started or questioning the whole concept behind it, You’ve come to the right spot.
The review below will explain all you need to be aware of about BlockFi starting with the steps to opening the BlockFi account, the services and services offered, and the various options” offered.
Facts About BlockFi – What is BlockFi?
In 2017, BlockFi was founded with the help of Zac Prince and Flori Marquez 2017. BlockFi is a fintech-related assets platform that seeks to revolutionize traditional financial services. It provides credit services for markets and individuals who have limited choices. To put things in perspective, not all people have the ability to access a savings account, and BlockFi hopes to make this an option in the future.
What is supposed to allow BlockFi to distinguish itself from other platforms for cryptocurrency is that its offerings are in line with the market’s leading rates. In addition, the company claims to be the sole independent lender that has genuine solid backing. Once the fundamental idea of BlockFi is covered, let’s get to the meat of the matter and look at the services and products.
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What services and products are available through BlockFi?
In terms of products and services are concerned, BlockFi carries an array of options. Starting with the services people can select from:
BlockFi Interest Account (BIA)
Through the BlockFi Interest Account (BIA), the cryptocurrency holdings can earn as much as 8.6% per year. In April 2021, people could earn 6% annualized with Bitcoin, 8.6% APY on stable coins (GUSD, PAX, USDC, BUSD) and 5% APR in the case of PAXG, 5.25% APY on Ethereum, 5.5% on LINK, 9.3% APY on USDT and 6.5 percent on Litecoin.
After an account is created and deposits have been made in the account, interest will be accrued and then paid out at the start of each month. A compounding effect can boost the annual return for each account holder.
However, the fact is that all BIA holders will receive one cryptocurrency withdrawal for free and one secure, free withdrawal each month of the calendar. The withdrawal process can generally be done as you like. However, this could require the incurring of withdrawal charges. For example, the withdrawal limit of 100 BTC per 7 days amounts to 0.00075 BTC. Similar to ETH Holders, 5 ETH per 7 days would amount to 0.02 per ETH for fees.
BlockFi Trading Account
BlockFi Trading is a good account for anyone who wants to sell, buy or trade various cryptocurrencies. Like the BIA account trading account, this one permits one to earn interest. The company’s team gave the following examples to ensure everyone is familiar with how the account works.
“If you deposit 1 BTC on December 1 st and convert BTC to ETH on the 15th, you will earn ~ 14 days’ worth of BTC interest and ~ 16 days’ worth of ETH interest when you receive your interest payment on Jan 1!”
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BlockFi Crypto-Backed Loans
BlockFi currently provides USD loans secured by cryptocurrency assets. In particular, customers will have to provide BlockFi with their crypto assets to guarantee the amount they are seeking. The process is considered simple since all applicants need to apply for a loan. Sit for up to 24 hours, and within 2 minutes of deciding on an answer, it will be paid in USD or GUSD or USDC. The money will be deposited directly into the person’s account who is paying the loan or cryptocurrency wallet.
However, this does not mean that BlockFi can provide money to anyone. In reality, the interest rates for the loan will be determined based on the amount of the loan, the credit history, and the location. The fees will be separated on an annual report prepared by the team and the amount of cryptocurrency needed to secure the loan. After the offer is scrutinized and the participants choose to accept it, the custodian of BlockFi, Gemini Trust, will decide from there.
It’s a highly desirable method of obtaining a loan, as the applicants are asked swift and concise questions, which allows them to obtain the loan quickly, and, most important of all, nobody will be required to sell their investments sooner than they anticipated. It is vital that BlockFi assures us that they will not run soft or hard checks on an individual’s credit, which leaves credit scores unaffected.
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What are the advantages of BlockFi?
In terms of BlockFi features, everyone ought to be aware that the company:
U.S.-based and Regulated
BlockFi is believed to be one of the few retail-oriented and interest-earning platforms based in America and complies with the regulations of the U.S.
Services for Any Level of Expertise
Suppose people are just starting in the realm of cryptocurrency or are familiar with its history and benefits. In that case, all services and products offered through BlockFi are designed to accept all with an open heart. The power of knowledge is in the hands of knowledge, and the team is confident that they are actively educating their clients so that novices can follow with an experienced.
Top-Tier Risk Management Processes are in Place
In addition to redefining financial services and redefining financial services, the BlockFi team is committed to making the company more scalable, with real longevity. To minimize risks that would otherwise cause them to be thrown out, like many cryptocurrency ventures, The team decided to stay away from investing in an ICO. They are described as “perfect” because borrowers and the BlockFi team suffered losses even with their loan portfolio.
A different aspect of risk management, particularly for clients, is security. When the cryptocurrencies are transferred to BlockFi, however, an authorized custodian such as Gemini is the one who will take the money. Then, the BlockFi team can lend cryptocurrency to several institutional counterparties.
Supporting the Biggest Names
Some of the most prominent names support BlockFi in the field, including Akuna Capital, Arrington XRP Capital, AVON Ventures, Castle Island Ventures, CMT Digital, Coinbase Ventures, ConSenSys, Galaxy Digital, HashKey Digital Asset Group, Kinetic, Morgan Creek Capital Management, LLC, PJC, Purple Arch Ventures, Recruit Strategic Partners, SoFi, Susquehanna, Three Arrows Capital, Valar, Winklevoss Capital, Bain Capital Ventures, Tiger Global, Paradigm, HRT, Parafi Capital, Jump Capital, Gaingels, Third Prime, CMS, and TVC.
Robust Security Strategy and Transparency
The BlockFi team is working on expanding its security program over multiple layers, with a particular emphasis on transparency. Through transparency, they could include security updates and proactive risk management, engaging all of their employees to participate in security processes, and/or increasing involvement from the industry. For any questions related to security, the rightful team can be reached by sending an email to [email protected].
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No Hidden Fees or Minimum Balances
We have mentioned that transparency is at the core of BlockFi’s principles, which seems true. Particularly, there aren’t charges hidden or minimum balances required to maintain accounts, and everything is clear at their site.
Flexibility is evident throughout BlockFi in general. In particular, individuals can choose the cryptocurrency they’d prefer to have their interest compensated using (i.e., BTC, stablecoin, or any other cryptocurrency). Additionally, it is possible to pay for one’s BlockFi accounts with either a crypto wallet or a bank account. This option is available through BlockFi Mobile App. BlockFi Mobile App offers not only the flexibility of the system but also provides convenience. Obtaining an installment loan with BlockFi is easy, with some flexibility regarding how funds are received.
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Frequently Asked Questions (FAQS)
Who is eligible to use BlockFi’s Services and products?
BlockFi offers services to both individuals and companies around the world. The service is available to all fifty U.S. states with offerings such as interest-earning accounts, no-cost USD loans backed with cryptocurrencies, and fee-free trading. A rewards credit card is in development in conjunction with Visa.
How long will it take to establish a business account or a regular account BlockFi verified?
Unlike regular accounts, which can be signed up in minutes, business accounts require more documents to be filled out during the sign-up process. As of the date of this writing, the team at BlockFi confirmed that approvals might take between 10 and 15 days. If a regular account approval has not been provided within 48 hours, an email should be sent to [email protected] requesting a closer look.
How much is the minimal amount of BlockFi account balance required for individuals?
Although there isn’t a requirement for a minimum balance on individual accounts, It is vital to keep in mind that there are fees to be paid for any account that is related to crypto. So long as the fees are paid, the requirement for a minimum balance can be relaxed.
What are the valid email addresses of BlockFi?
With fake email addresses increasing, additional measures must be taken to protect personal information. In this case, here are the possible email addresses belonging to BlockFi
- Help for Customers: [email protected]
- 2FA and Other Notices: [email protected]
- Other: [email protected]
- Account Management: [email protected]
- Investigations: [email protected]
- Security: [email protected]
- Partnerships: [email protected]
- Private Client Team: [email protected]
- Institutional Sales: [email protected]
Does BlockFi aid in the preparation of tax-related paperwork?
To U.S. taxpayers, BlockFi can provide two reports on the BIA and any trading activity conducted during the year. But it is, the IRS will view any earned income as a tax-deductible event for tax purposes in the U.S., and the same is true for cryptocurrencies. Interest earned on BIA, for instance, is subject to reporting by way of the 1099-Miscellaneous tax form. Those who made more than $600 in bonuses and interest in 2020 must fill out the 1099-MISC that has been available since Jan 31, 2021.
What’s the connection between BlockFi and Gemini are related?
BlockFi is under custodial care under the custody of Gemini Trust Company. Gemini Trust Company, LLC is a New York-based trust company and has become a Qualified Custodian chartered with the New York State Department of Financial Services (NYDFS) under Section 100 of the New York Banking Law and is subject to NYDFS capital reserve requirements. Also, BlockFi’s cryptocurrency holdings are owned by Gemini, which, of course, is a legally regulated business.