The interest we are able to pay is based on market conditions (e.g. what rate institutions are willing to pay to borrow specific crypto assets). In order to pay our clients crypto interest on a monthly basis and to meet withdrawal requests on a timely basis, we engage in a number of activities, including (1) keeping a material amount of digital assets available for withdrawal with third parties such as Gemini, BitGo, and Coinbase; (2) purchasing, as principal, SEC-regulated equities and predominately CFTC-regulated futures, and (3) applying risk management to the lending activities in the institutional market. The credit risks to these institutions are mitigated by credit due diligence and/or collateral (such as cash, crypto, or other assets). BlockFi also engages in a number of other revenue-generating activities that support its balance sheet and its payment of crypto interest. BlockFi reserves the right to adjust rates on a monthly basis, depending on those market conditions.
If there is ever a change to the rates or tiers, we notify clients well in advance so they can prepare their portfolio.
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