Founded in 2017 and located in New York City, BlockFi is a crypto lending startup that also provides crypto-funded interest accounts.
BlockFi raised $1.55 million in a funding round in 2018, from companies including Fidelity, Coinbase Ventures, SoFi, ConsenSys Ventures, and Kinetic Capital. In a second round of funding later that year, BlockFi secured $52.2 million in a round led by Galaxy Digital.
In January 2018, BlockFi launched its first product: USD loans backed by cryptocurrency to target cryptocurrency holders and enables them to offer their bitcoin, ether or litecoin assets as collateral for a loan.
BlockFi aims to provide loans at a 4.5% interest rate, where customers can still gain interest from their holdings and investments. If the price of their crypto collateral goes down by 50% from the time of the initiation of the loan, customers will be asked to either pay down their loan amount of increase their collateral.
In 2019, BlockFi launched its second major product to retail customers, a crypto-funded interest account. With this account, customers deposit bitcoin, ether or litecoin with the company for the assets to accumulate cumulative interest every month. BlockFi has previously advertized 6.2% annual interest, compounded monthly.
As of 2019, BlockFi’s loans are available in 47 states in the U.S, and the interest accounts are available to anyone worldwide, except for 3 states as well as in any country sanctioned by the U.S., the U.K. or EU.
In 2020, BlockFi fell victim to an attack, where a hacker managed to use an employee’s phone to access the company’s internal systems. Although they were able to access some confidential user information, the company said no funds were lost in the attack.