FinTech News
Crypto Lender BlockFi Raises $18.3 Million
While it may have been a rocky week for the stock market, it’s been a good few days for crypto. Potentially due in part to the volatility on Wall Street, Bitcoin has managed to stay on the right side of $10,000, currently trading for more than $11,500. On top of that, cryptocurrency lender BlockFi announced this week that it had raised $18.3 million to expand its crypto wealth management solution.
The Series A funding round was led by Valar Ventures — a firm founded by Peter Thiel, Andrew McCormack, and James Fitzgerald. Notably, while Valar has previously invested in various FinTech firms, BlockFi is their first crypto sector-centric funding. Other participants in the round included Winklevoss Capital, Galaxy Digital, ConsenSys Ventures, Akuna Capital, Avon Ventures, Susquehanna, CMT Digital, Morgan Creek, and PJC.
BlockFi says they “enable cryptocurrency holders to put their crypto to work.” Among the services they provide are loans, giving customers access to U.S. dollars without having to sell their crypto assets. These loans are backed by the borrower’s cryptocurrency, allowing them to access up to 50% of their asset’s worth. Interest rates on these loans start at 4.5% with terms of 12 months. On the other side of the things, BlockFi also offers a Crypto Interest Account, allowing customers to earn compound interest on deposits of Bitcoin, Ether, and GUSD.
In a press release announcing the funding round, BlockFi founder and CEO Zac Prince spoke to what the investment meant for his company, saying, “We’re excited to continue development at BlockFi that will bring us closer to our vision of a world where access to wealth-building financial products and services are not limited by geography or an individual’s net worth. Our talented team and strategic backers will continue to drive the crypto financial services infrastructure forward to facilitate adoption and value creation in the crypto ecosystem.” Meanwhile Valar Ventures general partner James Fitzgerald said of his firm’s investment, “Outside of all the hype and volatility of the crypto trading markets, there are teams, like BlockFi, that are building the infrastructure to allow investing in digital assets to become mainstream. We are excited to help BlockFi build robust ‘picks and shovels’ for this emerging asset class.”
Currently BlockFi’s services are available in 47 states and “services individuals and businesses worldwide.” The company also notes that it “operates with a focus on compliance with U.S. laws and regulations.” That last part may be key for the firm going forward as Facebook’s announced Libra project has renewed lawmakers’ scrutiny of cryptocurrencies. Despite those looming threats, BlockFi’s successful round helps cap off what’s been a surprising positive week in the world of crypto.
