BlockFi can return crypto yield accounts from US-accredited investors
BlockFi Yield is an interest-bearing crypto option. This option is available to accredited investors in the United States through a Reg D [506(c)] exemption from the Securities Act of 1933. BlockFi launched its first crypto interest product in February following a $100 million settlement with the Securities and Exchange Commission. It also agreed to stop offering it to the US public. Blockfy's interest-bearing crypto accounts allow US investors in certain states to lend their crypto in exchange for highly variable monthly interest payments.
According to data from Crunchbase, BlockFi held $14 billion in customer assets as of March 2021. It is not clear how different the terms of the BlockFi Yield and BlockFi Interest accounts will be, but they are almost the same. After paying out the largest settlement ever to US regulators with a crypto firm, the firm has been hit by falling cryptocurrency prices and the bankruptcy of Three Arrows Capital which is one of the industry's largest institutional borrowers. BlockFi was forced to take an $80 million loss after Three Arrow was unable to meet margin requirements on time. Recently, BlockFi resurfaced as a lender to financially troubled bitcoin mining company Core Scientific.
But it warned at the end of October that it would not be able to repay its debt. In the company's worst-case scenario, BlockFi would be on the hook for $60 million in outstanding debt. This summer, two of BlockFi's main competitors, Voyager Digital and Celsius Networks, had customer accounts frozen and declared bankruptcy. The company itself has entered into an emergency agreement with crypto exchange FTX US. Flory Marquez, BlockFi co-founder, and COO told Yahoo Finance that the summer events were a test of our risk protocols, and we are confident in our proactive risk management framework.
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