On 1 April 2019, BlockFi, a leading cryptocurrency lending platform, announced that the platform’s BlockFi Interest Account customers received their first interest payment for their Bitcoin [BTC] and Ethereum [ETH] deposits, on its official Twitter handle.
The announcement read,
“BlockFi Interest Account clients just earned their first interest payment on their BTC and ETH. Create your account today to start earning 6.2% interest APY on your crypto”
Brad Michelson, the Director of Marketing at BlockFi added,
“Best email notification I’ve ever gotten. Sign up to the
@TheRealBlockFi Interest Account and earn up to 6.2% interest APY on your crypto, compounding monthly.”
The firm launched the BlockFi Interest Account [BIA], the first cryptocurrency-based saving account across the globe, in the first week of March 2019. During its launch, the company promised an annual return of 6.2 percent, compounding monthly, resulting in the firm facing severe backlash from several well-known influencers.
More so, the firm had promised returns in cryptocurrency; with the first payment being completed successfully. To participate, a user had to deposit 25 BTC or ETH in their savings account.
Interestingly, the custodial service for the customers’ cryptocurrency assets was provided by Gemini Trust Company, LLC, one of the leading cryptocurrency exchanges around the world. This exchange platform is also regulated by the New York State Department of Financial Services and is one of the first cryptocurrency exchanges to get a BitLicense.
Bitcoin Badger, a Twitter use said,
“no way, third party risk is too high; is it insured? is it regulated? How do they carry out risk management? which jurisdiction should its users go to in case of dispute?so many questions unanswered”
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