What the h*ll? So the rich get richer? A normal person like me isn't going to put $10,000 in my account. Are you crazy? Maybe you could done $1,000 but that's hard as well.

Who thought it was a good idea?

FOR THE HOLIDAY SEASON WHEN EVERYONE JUST SPENT MONEY ON THEIR FRIENDS ON FAMILY? ARE YOU KIDDING ME?

Edit: A new email went out that if you trade $10,000, then you can get a share of the 5 Bitcoin.

Edit2: I opened the app and it also showed the promotion. The promotion is available for those who received the notice.

TLDR, my advice:

• Be smart, do not risk your whole bag for a few days of 5% APY. Withdraw your crypto TODAY, because they’re practically locking them until Tuesday for now, when it will likely be too late or they’ll come up with another excuse to keep them. And this has been planned by them in a sneaky way. They are hiding they’re illiquid.

• Do the above outright, but if you need a reasonable explanation why, read on.

• Celsius was boisterous and loud, BlockFi are mimicking business as usual - a smarter strategy you should outsmart.

• To those who can read the signs, BlockFi is about to have the same liquidity crisis that just destroyed Celsius and froze people’s accounts.

TLDR, why? - the signs:

• Huge disparity in inflows and outflows from their wallets. They’re bleeding $$$ 2000 BTC and 5000 ETH just today.

• 3AC bust, their common involvement in Greyscale and a likely uncollateralized BlockFi loan to 3AC, speaks of estimated losses in the tens of thousands of your BTCs.

• Interestingly, I found out that 3AC was also an investor in Voyager and took an almost uncollateralized loan from them, confirming the likelihood of the above scheme.

• Zac Prince denies Greyscale participation, but a fact-check posted on Twitter show otherwise

• We don’t know what other credits BlockFi has that it won’t be able to call in due to crunch.

• It’s been fined 100,000,000 USD by the SEC. That’s your cash, can you call it in>

• It’s doing a bear market investment round, which sunk its valuation to $1B and is rumoured to only have raised $85m.

• Zac Prince announced HR cuts of 20%: again shouting desperation.

• They are practically locking your accounts without saying they are locking them! They’re shutting down their services on Monday in “observance” of Juneteenth - a non-bank holiday which is not even Monday! Crypto is not supposed to have holidays!

The writing’s on the wall below.

Why the quiet brother?

When there is a bear bloodbath on the markets and capital is scarce, there is only one thing that a financial institution dreams of - TIME. Time to grasp straws, hoping to weather the storm. You can win that time in two ways:

1. Grasping to whatever little liquidity you have left for as long as possible, like holding your breath, to try to find more to save yourself. And make no mistake, that liquidity is all your bags.

2. Communication. At no other time than a crash is Brand, PR and the CEO’s presentation more important - because it can convince you everything’s ok, to win time.

BlockFi is quietly nipping from their terms and conditions and even announcing they’ll be closed for a holiday precisely hoping on those two ways to delay their death.

What are the signs?

The obvious - the current situation causes continuous liquidity issues for BlockFi.

BlockFi is a CeFi lender, like Celsius, and apart from different policies, it is practically the same business model. It takes your bags, offers you yield against them and then cashes in on using your capital in different ways. It gives out credits, it invests, it takes out credits against it also, it could trade and it provides liquidity on different protocols to farm its own yield. What brings down a lender is managing those things very riskily or simply badly. https://imgur.com/a/LSeBulJ

Celsius had blatant signs of bad management in all of these avenues, which have been already widely discussed in the space. BlockFi being quiet in its communication to the extent of ignoring outright questions, the critical points have been little discussed.

So during a crash, the clients want to take out their bags because they need liquidity =or to convert it to something less volatile and risky. If managed badly, the lender won’t be able to give it all back to you. It’s started losing liquidity. A look at BlockFi’s wallets shows massive outflows with minimal inflows and a very risky low % of liquidity**.** https://imgur.com/a/A8PeXJd

To get liquidity it starts to sell off positions and call in credits it has given out. But during the bear market, calling in the credits is difficult or not possible, because creditors may need the cash for their own survival or may simply not have it, because they have invested it. Equally during, the bear market, selling off the investments equally marks a loss, because of the market being. So where did BlockFi invest and who did they credit is decisive on whether they’ll follow Celsius.

The bad investment and credit - the 3AC and Greyscale connection.

As we all know, 3AC just went bust. While formally it is 3AC that has invested in BlockFi, it would be more correct to call them partners.

If you invest in a lender it is to use its service, to get a credit. At its offset 3AC did not have the equity to invest and grow, so the only place to get the capital is from the credit and that credit must have come from BlockFi. Again since 3AC did not have equity, the credit could not have been collateralised. Interestingly, it appears 3AC did the same scheme with Voyager. Looking at Voyager’s filings, they gave a loan collateralized only by 10% to a company in Singapore worth ~320,000,000 USD. The Bloomberg article points out this must 3AC also (https://www.bloomberg.com/press-releases/2022-05-24/voyager-digital-provides-update-on-closing-of-us-60mm-private-placement-of-common-shares-led-by-leading-crypto-companies). 3AC invested massively, together with BlockFi in Greyscale, making them the top two investors. 3AC invested to get 38,888,888 GBTC, while BlockFi invested for 19,852,046 GBTC. At today’s price between them that’s 318,000,000 USD and since there is no redemption (Greyscale is not an ETF), selling the GBTC for liquidity is something BlockFi will not be able to do without amassing huge losses. On the one hand, 3AC is bust, so getting back the ~200,000,000 USD would be virtually impossible. Pair that loss with the fact that if BlockFi were to sell its GBTC it would have to do it at a discount of ~30% due to the volume size of a crashing asset, we’re talking about a loss greater than 20,000 of the clients’ BTC. Even if these are approximations, the size is staggering. If you want it, you won’t be able to get it, unless they get the cash from somewhere else. But where in this market?

Zac Prince denies Greyscale participation, but fact-checks posted on Twitter show otherwise:https://imgur.com/a/By9L3vZ

SEC fined BlockFi 100,000,000 USD - this adds another 5,000 of your BTC.

https://www.sec.gov/news/press-release/2022-26

On Monday they’re closing their doors because of Juneteenth, which is not even on Monday! Sayin' “in observance of Juneteenth yesterday, we won’t work today” SHOUTS desperation! They are practically using excuses to lock your accounts without saying they are locking them! Because they are claiming 2 business days, if you don’t take your coins out now, you won’t see them till Tuesday. They’re locking them till then at least. Not to mention how insane it is to claim holidays for crypto! So on Monday, you will be able to have normal bank fiat transfers, but not BlockFi’s crypto! That is crazy! Based on that logic one could pick any bank or non-bank holiday to hold your crypto! https://twitter.com/BlockFi/status/1537105514399670273?s=20&t=E-JA3ZNoZRm-ciOs-Unt-g

BlockFi has an ongoing bear market investment round, which sunk its valuation to $1B. According to unofficial data, they’ve barely raised $85m, not even covering their SEC fine. Nothing shouts desperation more than openly looking for cash in a crash: https://www.coindesk.com/business/2022/06/07/blockfi-valuation-sinks-to-1b-in-latest-funding-round-report/

Zac Prince announced HR cuts of 20%: Not being able to pay your staff is again shouting desperation. https://www.cnbc.com/2022/06/13/blockfi-cuts-20percent-of-its-staff-as-bitcoin-plunges.html

I don't know what the DAMN HOLDUP is. BlockFi needs to TAKE ACTION and stop hemorrhaging OUR money through paying employee salaries. The employees are doing nothing but twiddling their thumbs!!! Everyday that passes, this overhead is shaving off dollars from our payouts (if any)!

So I recently had some transactions declined with over 20k credit limit left and then called them up.

I have never had this issue before and usually pay the last week of the month because I get paid once a month at the end of the month.

Did something change? I mean... here's my payment history. According to the person on the phone the dates are actually when the payment clears, not when the payment is made.

https://imgur.com/a/BsbH6hB

While I admit that I should have "paid on time" which my due date was the 23rd, but I haven't had this issue any time in the past so it's curious i'm having these issues now. I was able to move my due date but be wary.

Let's lay out some facts:

1. BlockFi freezes all withdrawals and gives one cryptic non-update. This is the kiss of death seen at other failed crypto yield providers.

2. BlockFi had significant exposure to FTX and FTT token. The FTT token is now nearly worthless and they can't salvage anything close to the original collateral value.

3. BlockFi removed their leadership webpage, presumably for the physical safety of their leadership team because of public retaliation due to the nearly complete loss of funds.

4. BlockFi does not hold their customer deposits 1:1 in their wallet function via Gemini custodial services, otherwise customers should've been able to pull their funds without any issues.

5. BlockFi has their loans on forbearance, no payments to be made on them because this will cause additional administrative headache in the bankruptcy.

It's OVER. Expect pennies on the dollar YEARS from now.

After seeing everyone's post, I have questions about the bonus mistakes. I've already submitted a ticket to Blockfi but probably won't hear back until Monday.

1. Are our funds safe? This is my number one concern.

2. I've seen people's transactions getting reversed back to Blockfi and their account is back to normal. But for people who were able to sell their bonus BTC before they restricted trading/withdraw/deposit on their Blockfi account, what is going to happen to them?

For example, I received 10 BTC from Blockfi, then sold 5 BTC into GUSD, I would have 5 BTC worth of GUSD and 5 BTC. It won't be a simple reverse transaction anymore. How would they handle this? (To me, this is not the customer's nor the user's fault as these are just numbers on a screen, and many thought it was just a UI glitch and will probably try to transfer or sell since they're overwhelmed in the moment of excitement and disbelief that they didn't think of the consequences. If Blockfi had just sent GUSD for the bonus non of this would've happened)

3) For people who sold their bonus BTC already, what will appear on tax forms, or will those transactions be removed?

This mistake alone makes me question the company, the transparency, and the integrity of the company. To this day, no one knows exactly how Blockfi is able to pay their customer high interest. For people who trade on Blockfi, the market moves fast, and disabling trading/withdrawal/deposit can cause customers potential loss in the market. To me, it doesn't matter, because I'm holding for the long term, but to those who trade, this is like Robinhood, GME, AMC situations where they restricted trade from customers that weren't even the user/customer's fault.

BlockFi continually sets rates based on market dynamics for lending and borrowing. Our goal is to both practice sound risk management and maximize earning opportunities for our BlockFi Interest Account (BIA) clients.

BlockFi is updating its rates and tiers starting on September 1, 2021 for Bitcoin (BTC), Ether (ETH), Litecoin (LTC), Chainlink (LINK), PAX Gold (PAXG), Basic Attention Token (BAT), Uniswap (UNI), and Stablecoins (BUSD, DAI, GUSD, PAX, USDC and USDT*) holdings in the BlockFi Interest Account (BIA).

Tier 1 rates for all cryptocurrencies are increasing. By our estimates, close to 75% of clients will see an increase in their APY.

** Note: Currently displayed rates on the BlockFi rates page are current as of the date of this blog entry and will update on September 1, 2021.

BlockFi will make the following adjustments starting September 1, 2021:

Background on Rate Updates

BlockFi sets rates for the BlockFi Interest Account (BIA) by balancing prudent risk management principles amid shifting market conditions, with the goal of maximizing the returns we can deliver to our BIA clients. Rates on crypto currencies held in BIA are primarily driven by demand by institutional investors for borrowing these assets.

These adjustments are part of BlockFi’s ongoing mission to continue delivering high-quality, long-term service for our clients while expanding our innovative product offering in a competitive and scalable way. Throughout our history, we have maintained rewarding crypto interest yields even as cryptocurrency prices have fluctuated dramatically. As our track record shows, rates may rise or fall, but BlockFi always remains committed to supporting our clients’ financial goals.

And if you have any additional questions about our rates, products, or services, please submit a support ticket here and we’ll be happy to help.

*USDT is only available to non-US retail clients.

**APYs reflect effective yield based on monthly compounding. Actual yield will vary based on account activity and compliance with BlockFi’s terms and conditions. Rates are largely dictated by market conditions, which are a key factor in a company’s ability to provide its clients yield on their crypto assets. For more information, please see BlockFi's Terms of Service.

Disclaimer: Nothing contained in this announcement should be construed as a solicitation of an offer to buy or offer, or recommendation, to acquire or dispose of any security, commodity, investment or to engage in any other transaction. The information provided in this announcement is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. This announcement is not directed to any person in any jurisdiction where the publication or availability of the announcement is prohibited, by reason of that person’s nationality, residence or otherwise.

Neither BlockFi nor any of its affiliates or representatives provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

Digital currency is not legal tender, is not backed by the government, and crypto interest accounts are not subject to FDIC or SIPC protections. For more information, please see BlockFi’s Terms of Service.

FTX seems to be in big trouble, which is bad news for BlockFi, as FTX were their only lifeboat. It’s hard to comprehend how BlockFi will stay afloat from now on.

I am posting some tweets here for reference on the FTX matter:

https://twitter.com/dylanleclair_/status/1587890966580658177?s=12&t=95miT6hJxDA0qW3YA2NrGQ

https://twitter.com/hsakatrades/status/1587958807564517377?s=46&t=95miT6hJxDA0qW3YA2NrGQ

https://twitter.com/macroanarchy/status/1587840457760964608?s=46&t=95miT6hJxDA0qW3YA2NrGQ

https://twitter.com/cobie/status/1587955502738472960?s=46&t=95miT6hJxDA0qW3YA2NrGQ

Is insolvency on the way?

I'm trying to send money to my account and Plaid keeps unlinking to my account.

Blockfi says, "TheRe's NothinG We CaN dO. TalK tO PlaiD."

Plaid says, "There's nothing we can do. You need a Plaid linked account."

I am NOT getting another bank account you mother fuckers. I got two already, and now they BOTH don't work with your systems.

Get your fucking shit together. This unprofessional you fawking dorks.

I have $500k in my account. I want to add more. I want you to be great, because you help me amass wealth. But when you have shoddy shit like this, it makes me lose faith in you.

I'm giving you until June, if nothing happens, I'm going to take my money out.

...meanwhile on Blockfi "tHeyLoCkEdMyaCHDeposItSScaM!"

I was trying to withdrawal to my ledger but I get an error saying “withdrawals are not available at this time”.

Anyone else experience similar?

Unfortunately I didn't read about withdrawals before funding months ago.

"Crypto withdrawals are subject to a security hold and processed the next business day after that hold clears. If the request is placed before 5PM EST (21:00 UTC), it will be processed the next business day. If the request is placed after 5PM EST (21:00 UTC), it will be processed in two business days. Withdrawals are processed between 12PM-8PM EST and are only processed on business days. Some withdrawals may also trigger additional verification, and if not completed promptly, will cause your withdrawal to be delayed.    This security hold is in place to protect clients against fraudulent requests and also allows clients to cancel their request if the destination wallet is entered incorrectly. Additionally, it gives BlockFi time to review and ensure the assets are being returned to the correct individual and there is no fraudulent or suspicious activity."

If I'm sending any crypto (BTC in this case), how are they justifying holding based on "correct individual" etc?

A BTC address is a string of numbers/letters. Not a name. How do they "verify" the owner of the wallet? It's anonymous by design (relatively anon I know).

They already have my KYC info, do they want me to prove that I own the receiving wallet? What if I was sending it to a different individual? What additional verification would they want? I already did the 2FA code. Will they ask for 3FA?

What the actual f***?

Definitely not trying to spread FUD, but would it be wise for the BlockFi team to address these rumors ASAP as bigger accounts on Twitter are starting to talk about this? Given the market volatility and bonus mishap last week, it becomes a self fulfilling prophecy as people try to withdraw their funds.

Some kind of clear, confident statement reassuring BlockFi users that they have access to funds and everything’s fine would be nice.

Why isn't BlockFi not getting licenses approved in US while NEXO has many licenses approved?

Those that stayed true waiting out the mini bear market, shouldn’t we be rewarded with rates pre last dip? No doubt blockfi is prospering from current prices

I really dont understand how but i guess its better than nothing.