BlockFi to Increase Deposit Rates, Removes Free Monthly Withdrawal


BlockFi CEO Zac Prince announced on Friday that the crypto lender would increase deposit rates and rescind a policy that allowed one free withdrawal per month.

This announcement comes after BlockFi had provisionally insured a $250 million revolving line of credit from FTX and laid off 20% of its staff to improve your finances. Fees for BTC, ETH, USDC, GUSD, PAX, BUSD and USDT deposits on your BlockFi interest account (BIA) will increase from July 1, 2022, while the company reduce fees by withdrawing BTC, ETH and stablecoins.

BlockFi Defends New Fees

To support its new pricing initiatives, the firm said its previously conservative rates had left room for higher customer rewards during the current market downturn.

BIAs are graded according to the amount of cryptocurrency held in each. Tier 1 bitcoin accounts holding 0-0.1 BTC will benefit from a 0.5% increase in APR, tier 2 bitcoin accounts holding more than 0.1 but less than 0.5 BTC will attract 2% more APY, while Tier 3 accounts holding more than 0.35 BTC receive a 0.9% increase. Tier 1 ETH accounts will earn 0.5% more APY, Tier 2 accounts 0.5%, and Tier 3 accounts 1.75. Outside the US, Tier 1 accounts holding USDC, GUSD, PAX and BUSD will earn 1.5% interest, Tier 2 2% and Tier 3 3%. Within the US, these stablecoins will earn 0.5%, 1%, and 2% APY for Tiers 1, 2, and 3, respectively.

Withdrawals of BTC, ETH, and stablecoins will incur fees of 0.00025 BTC (around $5), 0.01235 ETH (around $15), and $25, respectively. BlockFi said that 75% of cryptocurrency withdrawals had been executed for free by 2022, with the company bearing the cost. Therefore, you feel comfortable charging a maximum of $25 for withdrawals.

BlockFi expressed confidence in its new strategy, saying it faced less competition from other companies due to the 100% uptime of its retail platform and institutional lending desk, while others paused withdrawals. He also noted that the rise in US Treasury yields boosts loan and deposit rates. Treasury yields are the annual interest paid to investors who have a government security. According to InvestopediaTreasury yields affect lending rates to businesses and consumers to purchase vehicles and certain fixed assets, such as property and capital equipment.

Could FTX loans herald acquisitions?

Some analysts believe that investments by FTX CEO Sam Bankman-Fried to prop up crypto firms Voyager Digital and BlockFi overshadow the role authorities played in rescuing banks during the 2008 recession. Bankman-Fried recently praised BlockFi’s leadership in decisively eliminating counterparty risk when it liquidated Three Arrows Capital’s position after the hedge fund failed to honor lender margin calls.

FTX and other big cryptocurrency exchanges like Binance they have played a critical role in saving other companies during crises. Last year, FTX lent $120 million to crypto exchange Liquid, which it later acquired after the exchange lost $90 million in a hack, while Binance this year bailed out Axie Infinity developer Sky Mavis after a hack caused the company to lose 600 million dollars.

What do you think about this topic? Write us and tell us!


All information contained on our website is published in good faith and for general information purposes only. Any action that the reader takes on the information found on our website is strictly at their own risk.