BlockFi, a leading cryptocurrency lending platform, had captured multiple headlines in the space, first with a decrease in the offered interest rate and then the backlash that they received because of it. In a recent interview with BlockTV, Zac Prince, the CEO of BlockFi, cleared the air about the decisions taken by the company as well as sought to explain its target audience.
Prince explained that a large adoption rate came from groups that weren’t the target audience. He stated that the real focus was on retail investors who were not affected by the change massively. In his words:
“We found out that institutional investors who possessed assets north of $10 million was not our focus group. The company also did not want to provide a 6.2 percent yield in a concentrated way across the book. We dropped the interest rate from 6.2% to 2% only in April and till March everyone got the exact rate as promised. Our main aim was and still is the retail market.”
The CEO then spoke about the benchmark for interest margins in the space and claimed that as of now, there is no real benchmark. Prince added that the recent bearish to stagnant to bullish behavior of the market displayed the difficulty in creating a set benchmark. According to him:
“ If there is a benchmark, it will depend on the futures market yield as well as the credit market.”
Zac Prince also touched on the accusations levied against the company after the interest rate was lowered. After the initial allegations of fraud, Prince had said:
“We didn’t launch with a 6 percent rate with the intention of changing it one month later and pulling a big gotcha on everybody. That would be really bad business.”
During the recent discussion, the BlockFi official stated that despite the fraud claims made against the company, the data and the experience tells a different story. He went on to elucidate:
“ The clients who were affected the rate change were able to withdraw the deposits without any extra fees. And out of the rest of the clients, almost 70 percent stayed on with the platform. Whatever withdrawal requests we had received were handled quickly and with no overhead charges.”
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