While some well-known digital asset marketplaces are exiting the crypto-exchange sector in the US (too many rules, too little time), cryptoasset-to-USD lender and wealth manager BlockFi is bucking the trend. BlockFi currently provides services to customers worldwide, including 47 U.S. states, with interest-earning accounts and USD loans secured with crypto. Revealed earlier this week, BlockFi announced “BlockFi Trading,” allowing its global user base to better manage their digital assets with in-house trading. And why not?
In August, BlockFi raised a respectable $18.3 million in a Series A funding round. Now we know how some of that money is being spent.
In a release, BlockFi said, initially, users would be limited to Bitcoin, Ether and the Gemini Dollar (GUSD) within the BlockFi platform. The trading feature is, of course, complimentary to BlockFi’s other products like lending and the “BlockFi Interest Account” (BIA). BlockFi states that it currently pays interest rates up to 8.6% for balances held in BIA and an ability to borrow via loans at rates as low as 4.5% – a decent spread.
Zac Prince, CEO and founder of BlockFi, explains that so far they have focused on providing services already available in traditional asset classes to digital assets. With trading, they are taking a “big step” of bringing in new investors into the crypto world – necessary to scale.
“Growth of the crypto market overall benefits the entire industry and we’re excited to shift our focus in that direction, in addition to adding products and features that expand the value proposition for our existing clients,” said Prince.
Regulations and compliance remain key. BlockFi reports that it recently completed MSB registration with FinCen and they are expanding their state licensing strategy. Custody is handled by Gemini.
So can BlockFi compete in a landscape of crypto-exchanges that has become a bit crowded as platforms like Huobi and Polinie exit the US market? We will find out.