Wednesday, October 4, 2023

BlockFi Just Raised The Deposit Rates, Eliminated Free Withdrawals

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BlockFi just raised the deposit rates across BTC, ETH, USDT, and crypto deposits coming after layoffs at the company with a $250 million emergency line of credit from FTX so let’s read more today in our latest cryptocurrency news.

Crypto lending platform Blockfi just raised the deposit rates across a range of crypto and the company lowered withdrawal fees on the number of cryptos while ending the policy allowing one free withdrawal per month as both policies became effective on July 1. After the crypto crash seemed to wipe out the company’s main competitor Celsius and Blockfi was forced to lay off 20% of the staff to turn to FTX for an emergency $250 million revolving credit facility.

In the filing on Friday, BlockFi said it will increase deposit rates for BTC, USDC, ETH, GUSD, BUSD, PAX, and USDT. The company cites three factors allowing rate boost, decreasing market competition, effective risk management, and changing macro yield environment. The risk management, the company touted the past conservative rate strategy as giving wiggle room today to boost the rewards for customers during the market downturn.

As for decreasing market competition, BlockFi noted that they maintained 100% uptime of the retail platform and an institutional lending desk while others slowed down or paused their operations. Turning to the macro envrionemtn, Blockfi noted that there’s a rise in the US Treasury yields that are boosting lending rates and the deposits rates as well. In addition to the increasing rates, Blockfi said it will eliminate a policy allowing for free withdrawal of ETH and BTC as well as stablecoins once per month and the company will be lowering withdrawal fees on the assets. BlockFi added:

“In 2022, over 75% of our crypto withdrawals have been honored without any fees. BlockFi was subsidizing this cost for our clients. Due to increased withdrawal demand, we’ve decided to implement a modest fee (maximum of $25) to cover the costs of honoring those requests.”

Crypto Layoffs Continue, company, workforce,

As recently reported, FTX exchange led by Sam Bankman Fried entered into a negotiations phase to acquire a stake in the crypto lending company Blockfi according to reports in the Wall Street Journal. The acquisition talks came on the heels of the BlockFi announcement that it secured a $250 million line of credit from FTX which was seen as a bailout.

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