May 3, 2021

BlockFi Review

Read more about BlockFi
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As one of the world's first "crypto banks", BlockFi lets you earn interest and borrow against your cryptocurrency. But is it safe? Read on to find out.

Wondering if you waited too long to invest in crypto?

If so, earning up to 8.6% APY with BlockFi could be a great way to hedge your bets.

BlockFi offers crypto savings, lending and trading with impressive rates and low fees. Is it a safe place for your cryptocurrency? Read our in-depth review to learn more.

What is BlockFi

BlockFi is a New York-based cryptocurrency "bank" founded in 2017 by Zac Prince and Flori Marquez. Their goal was to provide credit services and financial products to markets that didn't usually have access to them, i.e. cryptocurrency.

As one of the first cryptocurrency banks, they offer several financial products, including the BlockFi Interest Account (BIA), which can earn as much as 8.6% APY.

They also provide crypto lending, which allows investors to use their crypto as collateral, and a trading platform with a limited number of cryptocurrencies.

Unlike many other cryptocurrency exchanges that make their money from trading fees, BlockFi makes most of their money by lending cryptocurrencies to other institutional borrowers, which they then use for trading and further lending.

These borrowers include:

  • Traders
  • Investment funds
  • Over-the-counter market makers
  • Businesses requiring crypto liquidity

They do also charge withdrawal fees for cryptocurrencies, which is covered further down.

Supported Cryptocurrencies
Compared to pure exchanges, the number of cryptocurrencies supported on BlockFi is quite limited.

It includes: Bitcoin, Ethereum, Litecoin, Chainlink, PAX Gold, USDC, Binance USD, PAX

Supported Countries
BlockFi is available in the U.S. in all 50 states. However, they do not currently offer any trading pairs in: New Mexico, Nevada, New York, Vermont, and West Virginia. BlockFi Interest Account is not available in New York.

BlockFi is available worldwide, except in sanctioned or watchlist countries.

Pros and Cons

Review BlockFi's pros and cons before signing up for an account. Here's the takeaway:


  • No minimum deposits
  • No monthly fees
  • No trading fees
  • Competitive interest rates on interest accounts
  • Company is based and regulated in the U.S.
  • Easy to sign up and get started
  • Easy to manage account from the app
  • Gemini (a security-focused crypto exchange) as custodian


  • Inconvenient withdrawal restrictions
  • Slow withdrawal times (1-2 business days)
  • APY is volatile
  • Fewer features than a traditional bank
  • Not FDIC- or SIPC-insured like traditional banks or brokerages
  • No investment guidance (best for people with existing knowledge of crypto)

Is BlockFi Legit?

BlockFi is inarguably a legit platform for crypto banking, with large institutional investors including Valar Ventures, Galaxy Digital, Fidelity, Akuna Capital, SoFi, and Coinbase Ventures.

BlockFi's primary custodian is Gemini Trust Company, LLC, a New York trust company regulated by the New York State Department of Financial Services.

  • BlockFi is not accredited with the BBB, and currently has no rating
  • BlockFi has a Trustpilot rating of 4.0


BlockFi has several distinctive features as a crypto bank, accessible both through a desktop site and mobile apps via the App Store and Google Play Store.

BlockFi Interest Account
Earn up to 8.6% (paid monthly) on select crypto assets, with no fees and no minimum balance.

The BlockFi Interest Account works by lending your cryptocurrencies to larger, institutional borrowers, who then use them for trading or lending, and pay interest, some of which passes to you[1].

Rates vary depending on the crypto you're lending and the amount, which decreases with volume. Full rates, which are subject to change, can be found on the BlockFi desktop site. Interest compounds monthly and is paid out at the beginning of every month.

Coming soon to BlockFi. The platform has opened a waitlist for a Bitcoin Rewards Credit Card, which will earn shoppers 1.5% cash back in Bitcoin on all purchases.

Crypto-Backed Loans
In need of cash, but not interested in selling off your rapidly appreciating crypto assets to get it? Consider a crypto-backed loan.

This feature allows you to use your currencies as collateral for a cash loan without transferring ownership and losing out on market gains. By not selling your crypto, you also avoid a taxable event in the eyes of the IRS.

The LTV (loan to value) ratio ranges from 20% - 50%, meaning you can get loans in USD, GUSD, and USDC worth as much as 50% of the value of your crypto collateral, at tiered interest rates:

  • 50% LTV: 9.75% interest
  • 35% LTV: 7.9% interest
  • 20% LTV: 4.5% interest (only available for BTC-backed loans valued up to $20k USD)

Trading Platform
Compared to other exchanges like Coinbase or Binance, BlockFi offers a fairly limited trading platform, with only 8 cryptocurrencies currently available for trade. On the flip side, those trades are zero-fee. BlockFi only charges for crypto withdrawals.

How can BlockFi offer fee-free trading, when other platforms make most of their money from transaction fees? The answer is simple: If you aren't the customer, you're the product.

Typically, when companies offer free trading to retail investors, it's because they're selling anonymized market data to big institutional crypto firms that want to know how people are trading.

Some people are comfortable with that. If you aren't, consider another exchange for your trading. It may cost money, but at least you'll know where you stand.


BlockFi operates what they call a zero-fee trading platform. However, this does leave out an important part of the picture, because BlockFi does charge a spread on buy/sell transactions.

They don't disclose it on the website, which can pose a challenge for traders looking to make informed decisions, but based on reports from multiple users, it seems to range from between 0.70 - 1.50%.

They claim this is to mitigate the risk of price fluctuations during the execution of trades.

If you want to know how to check the spread on your own trades, compare the buy and sell prices offered for a specific currency.

While there are no fees for setting up or using a BlockFi Interest Account, there are Withdrawal Fees, for example:

  • Bitcoin: 0.00075 BTC
  • Ethereum: 0.02 ETH
  • Litecoin: 0.0025 LTC

There are also rolling 7-day Withdrawal Limits:

  • Bitcoin: 100 BTC per 7-day period
  • Ethereum: 5,000 ETH per 7-day period
  • Litecoin: 10,000 LTC per 7-day period

Their Crypto-Backed Loans incur an Origination Fee, currently 2%.

How do you get money out of BlockFi?
Withdrawing money from BlockFi is not as easy as with some of its competitors. The first withdrawal per month is free. After that, you'll be charged fees by Gemini, BlockFi's custodian.

To withdraw money, sign in to your dashboard, click on the "Interest Account" tab, select the asset you wish to withdraw, click on the "Withdraw" button, and enter the amount you wish to withdraw and the wallet address for return.

Direct bank withdrawals are possible for amounts over $5,000 USD. Amounts less than $5,000 may be withdrawn as crypto assets, including Stablecoins.

How to Open an Account

It is easy to sign up for an account with BlockFi through their desktop site or mobile app:

  1. Visit or download and click the button to "sign up."

  2. From there, you'll enter personal information like name, birthdate, address, Social Security number, and contact info.

  3. You'll need to verify your email address.

  4. After that, they'll need photos of a picture ID and a picture of you (you can take it via webcam or your phone) for account security and KYC (Know Your Customer) purposes.

Is BlockFi Safe?

Safety is a more complicated question. While BlockFi is unlikely to run off with your crypto, you are exposing yourself to the risk of total loss if they default.

It is important to remember that cryptocurrencies are not insured by either the FDIC or SIPC. To protect users, they employ several security measures:

  • Two-Factor Authentication generated by the Google Authenticator app to prevent unwanted account activity.

  • Allowlisting, which lets users specifically choose which wallets they want to allow their assets to be transferred to.

  • PII Verification to make sure you are, in fact, you.

Investing always carries a risk-reward trade-off. Investing in cryptocurrencies like Bitcoin carries a heavier amount of risk than traditional investments like stocks and bonds because the prices fluctuate much more dramatically.

This is exactly what makes it an appealing investment for those looking for high gains over short periods.

Lending your crypto on platforms like BlockFi further exposes you to "counterparty risk". This is the risk that the platform or their borrowers go bankrupt and take your money with them. Avoid investing money you cannot afford to lose.

Has BlockFi been hacked?
BlockFi was hacked once in May 2019 via what is called a "SIM Swap Attack," targeting an employee's phone. The hacker was able to gain access to BlockFi's systems for approximately 90 minutes, acquiring customer information including names, email addresses, dates of birth, addresses, and activity history, but no funds, according to BlockFi. While BlockFi has since taken measures to prevent it from happening again, they recommend all users employ 2FA and preferred wallet Allowlisting to protect their accounts.

Does BlockFi report to the IRS?

Yes. BlockFi is required by law to report to the IRS. All interest earned on their savings accounts is considered taxable. Users will receive a 1099-Misc form at the beginning of every year, where they can find the exact amount of interest they earned and are required to report to the IRS.

Common Complaints

Some users are frustrated with BlockFi's withdrawal times, which are slower than some competitors - up to 7 days.

They do this in order to prevent fraudulent activity, but users may find it onerous nonetheless.

Can you get scammed on BlockFi?
It is possible to get scammed anytime you're dealing with cryptocurrency, but it is unlikely to happen on the BlockFi platform itself. Instead, be wary of investment gurus and recovery specialists on forums or review sites, always make sure emails are from a trusted sender, and guard your personal information carefully.

Contact Customer Service

Contact BlockFi customer support through their website Contact page, or through the "Help" section on their app.

Their AI-bot will attempt to answer your questions first, and if it fails, you'll be able to submit a ticket to their support team.

Phone support is available to active BlockFi customers from 9:30AM - 5:00PM EST Monday through Friday.

How It Compares

While BlockFi is a popular choice for crypto lending and borrowing, they are not your only option. See how they stack up to some competitors.

Celsius is another well-known crypto banking platform, with similar services to BlockFi. For major currencies like Bitcoin and Ethereum, the rates for base users and U.S. investors are not too different from BlockFi, but vary among coins.

BlockFi tends to offer more generous rewards overall. However, members able to take advantage of Celsius' rewards for holding CEL will likely find better rates there. This is unfortunate for average U.S. users, because CEL rewards are currently limited to international users and accredited investors.

Regarding crypto-backed loans, Celsius offers much more lenient interest rates, as low as 1.0% for loans with an LTV of 25%, where BlockFi charges 4.5.% for loans up to $20k backed with Bitcoin with an LTV of 20%.

The takeaway is that for American users, Celsius is the better choice for loans, and BlockFi is superior for earning rewards. For international and accredited investors, Celsius performs better overall.

Coinbase is one of the best-known mainstream cryptocurrency exchanges, offering over 50 cryptocurrencies and is available around the world.

In terms of their exchange, the variety of currencies available vastly outnumbers those on BlockFi. However, their relatively high fees should be taken into account if you're trading any of the crypto assets that BlockFi has on offer.

However, Coinbase does not currently offer anything like the BlockFi Interest Account, or crypto-backed lending, which are BlockFi's primary offerings.

Gemini is a popular, security-minded cryptocurrency exchange that offers a variety of features including Gemini Earn, a similar service to BlockFi's Interest Accounts.

While Gemini's interest rates are a little lower than BlockFi's, they do offer a much wider range of options for both their interest-earning accounts and on their exchange itself.

Because Gemini has so many more features, if you're interested in trading and don't expect to take advantage of BlockFi's crypto-backed loans, the difference in interest rates may not be enough to make BlockFi preferable over Gemini.

Bottom Line

Overall, BlockFi is a solid option for crypto banking. Their main features, the BlockFi Interest Account and crypto-backed loans, provide useful services to members of the cryptocurrency community, and may well serve to advance their founders' goal of providing financial services to those who had none.

While their rates of return may not be quite as high as those advertised by competitors, the same rates are available to everyone, whereas others, like Celsius, have tiered programs that make the highest rates impossible for many users in the U.S.

They don't offer the most lenient rates for crypto-backed loans, however, so investors interested in those may want to look elsewhere if they want to get the most for their money.


  1. ^ "What does BlockFi do with account assets?": BlockFi Help Center, 2020

Jeremy Harshman is a protector of art and writing at CreditDonkey, a personal finance comparison and reviews website. Write to Jeremy Harshman at Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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