Gemini is BlockFi's primary custodian. To provide the highest levels of security to any assets safeguarded by Gemini, they keep a majority in cold storage wallets and only a small, operationally determined amount in hot wallets. These hot wallets are covered by an industry-leading insurance policy and the total value of assets stored there will never exceed that policy - this rebalancing is managed using both automated and manual controls. As a limited purpose New York trust company, Gemini Trust is a qualified custodian and regulated by the New York Department of Financial Services. Additionally, Deloitte completed a SOC2 examination of Gemini's custody solution -- you can read more about Gemini's SOC2 compliance here and about their security here.
To earn interest on crypto, we lend out assets deposited at BlockFi to vetted institutional counterparties. Our risk and finance teams work collaboratively to review all of our counterparties before they become a qualified borrower. You can read about how we generate our yield for our interest accounts here. Additionally, here is a great resource to learn more on the intricacies of our crypto lending market.
Please also note that digital currency is not legal tender, is not backed by the government, and BIA accounts are not subject to FDIC or SIPC protections. This is not a risk free product.