BlockFi to raise deposit rates, removes free monthly withdrawals
The rate increases across BTC, ETH, USDT and other crypto deposits come after layoffs at the company and a$ 250 million exigency line of credit from FTX.
Modified Date:- Published Date:-Categories: Cryptocurrency
The announcement comes after BlockFi temporarily acquired a $250 million revolving credit line from FTX and laid off 20% of its employees to improve its finances. Rates for BTC, ETH, USDC, GUSD, PAX, BUSD, and USDT deposits in its BlockFi interest account (BIA) will increase from July 1, 2022, while the company will reduce fees for withdrawing BTC, ETH, and stablecoins. BIAs are rated according to the amount of cryptocurrency held in each. Tier 1 bitcoin accounts that have 0-0.1 BTC will benefit from a 0.5% increase in Annual Percentage Yield, 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 will 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 U.S., Tier 1 accounts holding USDC, GUSD, PAX, and BUSD will earn 1.5% interest, Tier 2 2%, and Tier 3 3%. Inside the U.S., these stablecoins will earn 0.5%, 1%, and 2% APY for Tiers 1,2, and 3, respectively. Some analysts believe that investments by FTX CEO Sam Bankman-Fried to prop up crypto firms Voyager Digital and BlockFi shadow the role played by authorities in rescuing banks during the 2008 recession. Bankman-Fried recently lauded BlockFi's leadership in decisively eliminating counterparty risk, when the hedge fund lender liquidated Three Arrows Capital's position after failing to meet margin calls. FTX and other large cryptocurrency exchanges such as Binance have been instrumental in shielding other companies during the crisis.Last year, FTX made a $120 million loan to crypto exchange Liquid, which was later acquired after the exchange lost $90 million in a hack, while this year Binance granted Axie Infinity developer Sky Mavis a hack. Saved the company after losing $600m.
Today’s news comes alongside reporting from The Wall Street Journal that FTX is in talks to acquire part of BlockFi.