BlockFi confirms it holds 50% of client funds in short-term positions with 10% in collateral

07/07 05:04

BlockFi confirms it holds 50% of client funds in short-term positions with 10% in collateral. The crypto lending firm confirmed it holds similar collateral levels to fractional reserve banking while showcasing its ability to deliver for clients with 100% access to funds. The company wrote, “we’ve been battle-tested through all types of market conditions.” BlockFi’s ability to broker a deal without affecting customer funds or halting withdrawals to support these claims. However, the need for funds in the first place may have investors worried. It affirmed that “100% of retail client withdrawal requests” have been honored while only 10% of client funds are held as collateral. 50% is held in short-term positions, and the rest may likely be in longer-term loans to third parties generating yield. The company also clarified that it has never had dealings with Celsius and does not partake in “speculative bets” on DeFi protocols. The email ended with a quote from Zac Prince, CEO, and Founder of BlockFi; “What I’m highly confident in is that at some point in the future — it might be six months or 18 months — we’re going to look back at some point in time over the next few months and we’ll say, ‘That was a phenomenal time to buy.’ And the reason that’s going to happen is because there’s so much long-term growth still ahead for this asset class.”

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