One company is looking more and more like it will be the first to gain meaningful traction with regards to providing the crypto equivalent of interest-bearing savings accounts. If you are not yet aware of BlockFI, then you probably should be.
BlockFi was founded in 2017, primarily as a crypto loan company, meaning that it was structured to take in crypto for US Dollars in return. In 2018, it began to do so, eventually going international as well.
Earlier this month, they went a step further by announcing the launch of their interest-bearing savings account, with which you can reportedly deposit Bitcoin and Ether, in exchange for consistent returns of 6 percent. According to CoinDesk, the reaction to this announcement has been mixed, to say the least. While BlockFi has already seen an influx of user funds to the tune of $35 million, criticism has already been brought to bear against their offering.
Reportedly, a lawyer named Stephen Palley pointed out that BlockFi’s terms and conditions state that they can change the account’s interest rate at any time, while others noted that no user funds are insured in any capacity. Proponents of the service like Anthony Pompliano, seemed to have little to say in response as of yet, beyond counseling critics to back up their opinions with real evidence.
Since this round of criticism is early-stage at this point, the saga has had little time to develop. Still, if there is any lesson to learn here, it is that in any early-stage industry, giving your hard-earned money to a project that promises you any sort of return is inadvisable without research.
Here, by research, we mean reading into the project’s documentation, as well as consulting with a legal authority of some sort before making any sort of investment. Though this has been said time and time again, it is the only way for any early-stage investor to protect himself or herself with any reasonable degree of certainty.
By: BGN Editorial Staff