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Crypto: Crypto lender BlockFi sees ‘increased institutional demand,’ CEO says, as competitor Celsius pauses withdrawals


Zac Prince, chief executive at crypto lender BlockFi, said the company has been fulfilling “increased demand” from institutional borrowers, despite the sharp rout gripping digital assets and an onslaught of industrywide layoff announcements.

Price also said, in a Thursday tweet, that BlockFi has satisfied all withdrawal requests pursuant to its terms of service, as the company attracts increasing attention after its competitor Celsius caused shock waves by pausing all withdrawals and transfers among accounts since Sunday.

BlockFi has been “fulfilling increased demand from institutional borrowers at higher interest rates, similar to rate moves in traditional markets such as the U.S.,” Prince tweeted. Treasury yields hit multiyear highs on Tuesday, before the Federal Reserve raised its benchmark interest rate by 75 basis point rate.

“As we always have, BlockFi will pass on as much yield from our lending activities to our retail clients as possible,” Prince wrote. The company will implement new rates from July 1, according to Prince.

BlockFi currently allows eligible consumers to earn interest of up to 7% APR on their crypto deposits, according to its website, while most “high yield” savings accounts in U.S. dollars offer annual percentage yields closer to 1% or less.

Another crypto lending firm Celsius, which has paused all withdrawals of funds, offers yields of up to 18.6% APR. Celsius has reportedly hired restructuring attorneys to advise on possible solutions for its mounting financial problems, according to a report from The Wall Street Journal.

Meanwhile, Prince said that BlockFi has responded to mounting pressures in crypto by acting “decisively to mitigate risks,” including through margin calls and asset liquidations, including “with a large client that failed to meet its obligations on an overcollateralized margin loan.”

“No client funds are impacted,” Prince added.

Prince wrote the Twitter thread after the Financial Times reported that BlockFi had liquidated at least some positions of Three Arrows, an influential crypto hedge fund that is rumored to be in stress.

On Wednesday, the Block reported that Three Arrows is “in the process of figuring out how to repay lenders and other counterparties after it was liquidated by top tier lending firms in the space.”

Three Arrows in March was estimated to have around $10 billion in assets under management, according to Bloomberg, citing data from Nansen. It’s size made it a major player and one of the most high-profile hedge funds in the crypto space.

The firm’s co-founder Zhu Su tweeted late Tuesday that “we are in the process of communicating with relevant parties and fully committed to working this out.” Su didn’t respond to a request for comment.

Early this week, BlockFi said it was slashing about 20% of its head count, as the fast-changing macroeconomic environment weighs on the company’s growth rate.

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