- Allows to borrow the funds against the crypto assets with a low-interest rate.
- Provides 24/7 customer service with a customizable lending solution.
- Have proper control over the funds, which leads to late payments withdrawal.
BlockFi
Was launched in 2017. It is a US-based centralized finance company. It supplies a variety of financial services for private and institutional clients. BIA – BlockFi Interest Accounts enable the users to earn interest annually on cryptocurrencies which lately been deposited to their accounts. It lends the users deposits which later pays it back with interest on the BlockFi which in return pays it o the users.
It prioritizes users’ deposits over the other companies’ equity in order to reduce the risk. It also allows exchanging of cryptocurrency as collateral and borrows some percent of the collateral values in US dollars. It is a kind of service users can get cash access instantly. Without any hassle, and also avoids fees and taxable events.
It provides “no fees” crypto trading services. But the exchange rate is suboptimal. Also, it provides good solid support to the customers. The process of the withdrawal is a little longer as it is a centralized company. Which speaks about their control over the funds. In order to maintain privacy and security BlockFi uses traditional and DeFi services. This allows the users to earn a good interest rate and easy borrowing.
Permission granted by United States judge
BIA accounts were used for lending the business which was used by the BlockFi Judge Bankruptcy Micheal Kaplan stated. Mean the funds will be used later in order to repay the creditors. So the interest on the customer’s deposit and the other funds were kept separate. Which were not paid by the Wallet Program.
And it was also mentioned that those who tried to transfer the funds from the wallets will not receive any refund. The company seized the service when nearly 48,000 clients tried to transfer the fund from their BIS wallet on 11 Nov. And also halted the customer withdrawal before filing the bankruptcy.
Due to the scale and complexity of Chapter 11 “cases much work remains” in defense of the phonology deadline the BlockFi lawyers stated. Whereas the company owes up to $10 billion to over 100, 000 creditors. And were asked to submit their bankruptcy report by 15 May.
The New Jersey Bankrupt judge granted the extension of 48 days to BlockFi to submit the exit plan. And for exploring the sale of the company assets and restructuring.
The Rise and the Fall
The BlockFi begins in 2017 with the aim to provide to provide credit services to the cryptocurrency market. In 2018 Blockfi raised $1.55 million which was later raised by $52.2 million through funding which was led by Mike Novogratz’s Galaxy Digital. In March 2019 it offered compound interest accounts by launching a crypto deposit account. Late in 2019, it got into the crypto trading game which charged zero fees on purchases and sales.
Suffered from a minor hack, in 2020. But later raised $50 million in a series C round which was lead by Morgan Creek Digital. In its run towards being the broad platform with a wide range of services it in 2022it filed for bankruptcy.
