BlockFi Review 2022: A Crypto Exchange With a Rewards Credit Card, But Limited Coins

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BlockFi can be a good choice if you want to trade your crypto without complicated fees and are interested in a crypto rewards credit card.

BlockFi is based in Jersey City, New Jersey, and was founded in 2017. BlockFi has received attention for its high-yield crypto interest accounts from both clients and the Securities and Exchange Commission. It has also had complications with its lending product, although that may not be a problem for most everyday investors who only buy and hold for long-term value growth.

The company recently settled with the SEC after it was accused of failing to register its retail crypto lending product, among other things. BlockFi agreed to pay $50 million in fines to the SEC and another $50 million to 32 states, the SEC said in February. The settlement also required BlockFi to stop offering BlockFi Interest Accounts to US-based users.

We have reached out to BlockFi for comment on the SEC matter, and the company said in a statement that it is working to bring its product into regulatory compliance and registering with the SEC under applicable statutes, after which it will wants to re-release crypto interest. earn product from US customers.

“From the day we started BlockFi, we have always known that a strong commitment to regulators would be critical to the adoption of financial services powered by cryptocurrencies,” said BlockFi CEO and founder Zac Prince in the statement provided. “We plan for BlockFi Yield to be a new SEC-registered crypto interest-bearing security that will allow clients to earn interest on their crypto assets.”

Despite the pending issues with its lending and crypto interest accounts, BlockFi offers a relatively straightforward crypto trading experience, especially in regards to the way it folds its trading fees into overall crypto prices. Combine that with its BlockFi Rewards Visa Signature credit card and it could be an interesting option for crypto investors.

Pros and Cons of BlockFi

Pros

No trading fees

Instant Transaction Execution

Credit Card Rewards

BlockFi at a glance

Less than 20 cryptocurrencies available No trading fees, but there are withdrawal fees Ability to borrow with crypto as collateral Store coins in BlockFi’s custodial wallet or move them to your own walletMinimum trading amount of $20Request a rewards credit card

Cryptocurrencies available on BlockFi

BlockFi does not offer many cryptocurrencies, although it does have some of the most popular, including:

Bitcoin (BTC)Ethereum (ETH)Litecoin (LTC)Bitcoin Cash (BCH)Pax Gold (PAXG)Uniswap (UNI)DAI (DAI)ChainLink (LINK)Basic Attention Token (BAT)Algorand (ALGO)US Dollar Coin (USDC) Tether (USDT)

BlockFi Fees

BlockFi does not charge any trading fees. Instead, the costs of spreading, or the difference between what it costs and what you pay for it is baked into the quoted price, and you may find cryptos for less on other exchanges. The prices you can trade at may differ from the market price you see on the list, so pay attention to the actual price you are trading at, rather than the list price. This helps keep your records and helps you stay on top of your transactions.

Withdrawal Fee

There is no fee for a withdrawal to a bank account via ACH wire transfer, although you will see a $20 fee for domestic transfers

If you decide to cryptocurrency withdrawal To an external wallet, you will pay a withdrawal fee based on the cryptocurrency involved and may be subject to a minimum and withdrawal limit. While this won’t affect many everyday investors, you can, for example, withdraw up to 100 BTC in a seven-day period.

Some assets allow one free withdrawal per calendar month on BlockFi, including:

Other assets, such as ETH, LINK, PAXG, UNI and BAT do not have a free withdrawal option, so you always pay the fee to cash out.

Withdrawal fees are charged in the corresponding cryptocurrency. So if you withdraw ETH, you pay a fee of 0.015 ETH. However, fees and limits may change in the future, so check the terms and conditions before moving assets from BlockFi to your own wallet.

BlockFi Security

BlockFi has a custodial wallet. When you send US dollars to BlockFi, it is converted to the same amount as represented by a US dollar pegged stablecoin. Your stablecoin is basically what you exchange when you buy other cryptos with your BlockFi account.

Your assets on the platform are actually in the hands of a regulated custodian, including Gemini, which is a BlockFi partner. BlockFi touts its Gemini partnerships as an example of how coordinating with other leading crypto firms provides users with greater protection and security. BlockFi also offers security measures, such as setting your account to only withdraw funds to approved wallet addresses. This reduces the chance that someone who hacks into your account will withdraw from your wallet to an address that is not on the whitelist. In addition, BlockFi offers two-factor authentication.

Your money is not in savings accounts; it is exchanged for stablecoins, so it is not actually held as cash. That’s why you don’t have access to Federal Deposit Insurance Corporation (FDIC) or Securities Investor Protection Corporation (SIPC) insurance† The FDIC is a government agency that insures deposits and oversees consumer protection financial institutions, with the goal of preserving public confidence in and stability of the U.S. financial system. The SIPC is a non-profit organization that aims to recover investors’ securities and cash when a brokerage firm fails.

additional details

Rewards Credit Card

BlockFi users can apply for the BlockFi Rewards Visa Signature credit card, which offers 1.5% cash back in crypto. You can also get cash back offers on eligible Bitcoin transactions. The crypto rewards will be deposited into your BlockFi account on a monthly basis.

The card has a variable APR of 14.99% – 24.99% and you will not see any annual or foreign transaction fees. Balance transfers are not allowed and the card is not available to residents of New York State. For people interested in a more limited crypto investment strategy with credit card reward points, the BlockFi card could be an interesting product – keep in mind that the reward percentage is comparable to other cards that will refund you in cash.

Loans

While we wouldn’t advise most everyday investors to mess with crypto loans, they are available on BlockFi. You can get a loan for up to 50% of the value of your BTC, ETH or LTC if you have crypto that you can use as collateral. Rates start at 4.5% and there are no early repayment penalties, but the loan does come with some risk. If the value of your cryptocurrency drops too much, you may need to pay off some of it or add more crypto to the account to meet the requirements.

BlockFi Interest Account

While not currently available to users in the US, the interest-bearing account is designed to earn interest on crypto held in the account. BlockFi is in the process of registering a similar product called BlockFi Yield, with the SEC. If the SEC approves this new product, a version of it would be available to customers in the US.

Who is BlockFi best for?

BlockFi is best if you are a beginner to intermediate crypto enthusiast who likes to manage various aspects of your finances using crypto. It works if you want to buy, sell and trade limited coins from a custodial wallet quickly and easily, while having access to other services like credit card rewards.

If you are a more advanced user, you will find that BlockFi is lacking due to the limited coins available to trade compared to other exchanges like Coinbase, eToro and Gemini, which offer significantly more options.

Open an account with BlockFi

make one BlockFi Account is quite simple. You must provide information about your identity, including name and address, and provide photo ID. You also need to connect a funding source to fund the account. Once your account is opened, you can deposit and start trading.

BlockFi compared to other exchanges

BlockFiCoinbaseeToroCoinsLess than 20 cryptocurrencies150+ cryptocurrencies50+ cryptocurrenciesFeesNo additional trading fees as spreads are priced in 0.50% spread; trading fees between 1.49% and 3.99% (or $0.99 to $2.99 ​​flat rate) 0.75% to 4.9% spread (varies by crypto)Wallet storage Keep in BlockFi’s wallet or transfer to your own wallet Store coins on the exchange, in Coinbase wallet or transfer to your own walletStore coins in the eToro account, eToro wallet or transfer to your own walletMinimum transaction$20$2$25

Frequently Asked Questions

Can BlockFi be trusted?

BlockFi provides you with a way to buy, sell and trade cryptocurrency, but assets are not protected by the FDIC or SIPC. Assets at BlockFi are held with trusted custodians, including Gemini. BlockFi offers a number of security measures, such as designating specific wallet addresses for withdrawal and two-factor authentication. There was a hack of BlockFi with a SIM swap, but BlockFi says no money was lost and the hacker was unsuccessful in trying to access customer assets.

Can you lose money on BlockFi?

As with any investment, if you buy crypto on BlockFi and the price drops, you can lose money. In addition, because your BlockFi account is not protected by the FDIC or SIPC, you could potentially lose money if the company goes out of business.

Is BlockFi a credit card?

BlockFi is a platform that offers consumers the opportunity to buy, sell and trade cryptocurrencies. It also offers a digital wallet and issues a Visa credit card that earns rewards in crypto.

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