BlockFi Interest Account Update: No New Accounts or Funds

The BlockFi Interest Account is no longer available to people residing in the United States as of February 14, 2022.

Let’s go over what happened, how this will effect BlockFi, and what other options are available for those who want to continue earning interest on their crypto assets.

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Update on BlockFi Interest Account

BlockFi Interest Account (BIA) is an interest-bearing account that holds coins you’ve deposited or purchased on the exchange. It’s a popular product that works much like a traditional savings account. The major difference is that it doesn’t have FDIC insurance to protect it against failure.

Many readers know that I’ve been using BIA to earn interest on my crypto holdings. I transferred $50,000 there and exchanged it for stablecoins (GUSD and USDC) that’s earning me a current rate of 8.75% APY.

Unfortunately, this type of account is no longer available to new customers in the United States. Existing customers will continue to earn interest on the funds currently in their BIA.

Existing and prospective BlockFi clients outside of the U.S. are unaffected by these changes and continue to have full access to the platform, including opening new BIAs and adding assets to existing BIAs.

So what happened?

Regulations happened.

This is a nascent industry and regulation of the fast-evolving crypto world is in flux. While cryptocurrencies haven’t been deemed to be securities (or not yet at least), the Securities and Exchange Commission (SEC) cited case law that would make the BIA a form of investment contract.

In their settlement with the SEC and state regulators, BlockFi can continue to serve existing BIA clients, but clients are not allowed to add further assets to their BIAs.

BlockFi intends to file a new registration statement to the SEC for BlockFi Yield, a new crypto interest-bearing security. This would make it the first crypto account ever to be registered with the SEC. It will be available for new and existing BlockFi customers and upon launch (expected within the next 3-9 months), will replace BIA.

No Effect on BlockFi Wallet

It’s important to note that this doesn’t affect your ability to buy, sell, and store your crypto assets on BlockFi – you can still do it all through the BlockFi Wallet account. You just won’t have the ability to earn interest by transferring crypto to BIA.

The sign-up bonus up to $250 is also unaffected. Going forward, the bonus will be credited into the BlockFi Wallet account instead of BIA based on the amount you deposit:

Deposit AmountBTC Bonus
$100 – $1,499$15 BTC
$1,499 – $19,999$20 BTC
$20,000 – $39,999$40 BTC
$40,000 – $74,999$75 BTC
$75,000 – $99,999$100 BTC
$100,000+$250 BTC


What will happen with my BlockFi Interest Account?

You will still have your BlockFi Interest Account (BIA). You will continue to earn crypto interest, which will be deposited monthly in your BIA.

Can I add funds to my BIA?

No. BIA clients based in the United States may not add further assets into their BIAs. You’ll be able to add additional funds into your BlockFi Wallet, which is the default account for buying, selling, and storing your crypto assets.

You are able to move assets into your Wallet to trade, but once moved from BIA to Wallet, they cannot be moved back and they will cease to earn interest.

When can I get BlockFi Yield?

This is dependent upon the registration process with the Securities and Exchange Commission. Once the BlockFi Yield registration statement is filed and declared effective by the SEC, BIAs of U.S. clients will be exchanged for BlockFi Yield, unless clients instruct BlockFi otherwise.

As of February 2022, BlockFi is estimating that BlockFi Yield will be available in 3 to 9 months.

Alternatives to Earn Interest on Crypto

The question everyone has been asking is, Where can I earn interest on crypto now?

There are a number of cryptocurrency exchanges that still offer interest on your crypto assets. Here’s what I’m doing since I was holding crypto in my BlockFi Interest Account before the SEC resolution was announced:

  1. Maintain $20,000 in GUSD in my BIA – that’s the maximum amount that can earn the highest interest rate of 8.75% APY per this rate table.
  2. Use other crypto exchanges and platforms to earn interest on the rest of my assets.
  3. Store the rest that I intend to hold long-term (HODL) in a cold, offline wallet.

Regarding point #2, I give priority to companies based in the United States, but give some weight to places that offer higher rates and free withdrawals.

1. Gemini for GUSD @ 8.05% APY

Gemini is based in the U.S. and is a highly regulated cryptocurrency exchange. It’s also the company that launched the Gemini Dollar (GUSD) token. Of all the crypto platforms, I trust Gemini the most.

Currently, they’re offering 8.05% APY on their own token and that’s where I plan to put the rest of my GUSD.

New Gemini users can also get a BTC bonus of $10 or $50 for opening an account.

2. Celsius for ETH @ 5.35%

Celsius Network is also located in the U.S. and the platform where I hold my Ethereum (ETH). It’s a large company used by many people and a safe option within the context of cryptocurrency.

Not only are they offering 5.35% APY on ETH, but you can also get an $820 ETH bonus for holding ETH there (and a $50 BTC sign-up bonus to boot).

With Celsius, you get an unlimited amount of free withdrawals.

3. Voyager for BTC @ 4.75%

Voyager is a publicly traded cryptocurrency platform founded in the U.S. in 2018 and offers 4.75% APY on your Bitcoin (BTC) holdings.

That’s actually a little lower than Celsius’ rate of 6.20% APY for BTC, but that’s okay with me. I prefer to diversify my crypto across several places to spread my risks. This is personal preference of course, but I don’t feel comfortable putting all my eggs in one basket.

New users can get a $25 BTC bonus using my Voyager referral code when they make a trade of $100 or more.

4. Hodlnaut for USDC @ 12.73%

Hodlnaut is a Singaporean fintech company that follows Singapore’s financial regulations. While it sits outside the United States, it deserves some attention as it pays an incredibly attractive 12.73% APY on USDC stablecoins.

Additionally, Hodlnaut accepts deposits and pays interest on Bitcoin (BTC), Ethereum (ETH), Dai (DAI), Tether (USDT), and Wrapped Bitcoin (WBTC).

It’s a legit company and is worth considering if you’re looking for a platform that pays a high yield on crypto. However, as the company is based in Singapore, U.S. residents will need to be okay with stepping outside of the protections provided by U.S. financial institutions.

You can join Hodlnaut for a $20 sign-up bonus paid in-kind and you’re provided with one free withdrawal per calendar month.

5. Ledger Nano X @ 0%

I hold the majority of crypto in my Ledger Nano X. It’s a hardware wallet that stores your crypto assets offline, which makes it virtually impossible for hackers to steal your crypto. Another popular cold storage wallet is Trezor Model One.

With these wallets, they’ll generate a seed phrase, which is a 24-word phrase that essentially acts as your private key. You should keep this in a secured location and never share the phrase with others. Anyone who knows your seed phrase can access your crypto assets.

Needless to say, don’t leave this out in the open. Hide it in a safe place. I bought this indestructible corrosion-free, fireproof steel card to write down my recovery phrase and store it in a bank safe.

While you don’t earn interest with this option, nothing is more valuable than having peace of mind knowing that a significant amount of your cryptocurrency is protected.

Some people start storing some of their crypto this way when their assets are worth $1,000 while others don’t bother until they have a lot more than that. It’s up to you to decide what you’re comfortable with.

The Bottom Line

Existing users may be upset that they can’t add more funds into their BlockFi Interest Account and new users may be disappointed that they can’t create a BIA, but I think this will be good for cryptocurrency adoption long-term.

I welcome more regulations because it forces companies to be more transparent. One of the reasons BlockFi got fined $100M is understating the risks associated with its lending activities, saying they were “typically” over-collaterized when most were not.

As investors, the more information we get before we make a financial decision, the better. I’m certain that the scrutiny will continue in this space and we’ll have to pivot as things evolve.

While this plays out, don’t forget there are other cryptocurrency opportunities to look into. There are many ways to earn free crypto, including taking advantage of sign-up bonuses on various exchanges and platforms.

And if investing in cryptocurrency isn’t for you, there are other great options that are fully backed by the government, like Series I Savings Bonds.

About John Pham

John Pham is a personal finance expert, serial entrepreneur, and founder of The Money Ninja. He has also been fortunate enough to have appeared in the New York Times, Boston Globe, and U.S. News & World Report. John has a B.S. in Entrepreneurship and a Masters in Business Administration, both from the University of New Hampshire.

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2 years ago

A great write up, as usual. While I respect TMN’s financial decisions and admire his acute and astute business intelligence, I want to share my five cents on Voyager. The judgment and decision to use that company or not, however, is entirely the reader’s.

I have had bad experience with the company, since becoming a customer in Sept., 2021. They have a staking program where the rewards are based on the so-called monthly average balance. They have been offering 9% APR for staking USDC, for the low requirement of a monthly balance of $100. I decided to make deposits and try it out. I accumulated something over $1000 after a week or so transferring fiat (US dollars) into the account. However, my monthly balance was sitting at the low hundreds, up till a point where it stopped going up. After about 20 days or so, I dropped their customer service a message, reporting the error. I didn’t hear from them for days, until one day I logged in and was asked to provide proof of identity, in an attempt to “reverify” me. My instinct told me this was related to my question, but since I have nothing to hide and have long before verified my identity, I went ahead and resubmitted my driver’s license. I was approved after a day or so, and then I saw the monthly balance correctly reflected. Well, I thought, problem solved, at least, although not so honorably, but why not let it go? And I did, until I decided to withdraw my crypto and later my money.
At first, I discovered that my account is “not able” to withdraw crypto. I clicked on their FAQs and checked whether any limitation applies to me, and concluded that none did, so after a few tries, I contacted customer service. My message wasn’t replied to for about five days or so, during which time I sent two more to nudge them. In the mean time, I was, to be honest, disgusted by their customer service, so I decided I am going to withdraw fiat.

For those of you who use the platform you are familiar with the fact that every fiat withdrawal request always shows up as pending and will have an info message which says processing may take up to ten business days. While this fact does not bother me, the fact that the withdrawal actually was “semi-frozen” was a red flag. Usually, if you make a withdrawal at BlockFi, Gemini, or DimeFi, or a reputable crypto platform, you would see your money in your bank in the ball park of two to five days, usually less than three. In the case of Voyager, nothing came to my bank for over a week, and in the App, that request was still pending. I want to point out that I wasn’t withdrawing everything, and the amount wasn’t even high, about $1100. I made the request on Dec 12, 2021, and the money eventually cleared on Dec 24, 2021. Some of you might dismiss me as making a fuss about getting my money “slow”, but here is one last piece of information I want to share before you make your final judgment. I got in touch with their customer service again, after five days of no activity. Customer service did not respond, as usual, for days, and I eventually sent them another message begging for my money. After two more days or so, someone responded to my earlier crypto withdrawal question and “thanked” me for providing my identity documents and assured me that now my account is enabled for withdrawals, but no feedback to the fiat withdrawal. Fortunately, two days or so after that, I noticed that the status in my App for that withdrawal changed from pending to completed. I eventually received my money. In the course of waiting for my money, I started to read App reviews on the App store and some on trusted pilot. I saw an overwhelming amount of negative reviews of this company and extremely angry and frustrated customers. Of course, there is no way for me to verify any of their claims or frustrations, but I somehow, coupled with my own experience, had the feeling that it is a fishy company. My decision, after all these incidents, is never again.

2 years ago

So basically I have some coins in my interest earning account within BlockFi and that money will continue to earn interest as if nothing had changed, however, if I want to exchange it for other coins, I have to move it out of the interest bearing account and into the trading account at which point those funds are no longer eligible to move back into the interest bearing account.

I have a small amount of money in USDC on BlockFi that I have been using to fund DCA purchases of BTC, ETH and BUSD on BlockFi and earn interest on those as part of an alt-coin experiment I’m doing.

Since I can no longer add funds to these accounts, I need to find a new home for coins that I can earn interest on. I am familiar with Celsius, Gemini and Nexo although I don’t currently have an account with any of them. My question is where would you recommend I move the remainder of this experiment to?

In case it helps, a quick rundown on what I’d really like. Obviously I’m based in the US. I am okay linking a bank account and doing KYC. I plan to pay taxes on this and honestly I prefer a company that I trust over one paying a slightly higher percentage. This is why I picked BlockFi over the others in the first place. When I did my initial research I though BlockFi seemed to have their ducks in a row and actually the lower interest rates made me think that it was likely more sustainable than some of the other exchanges out there. At the time Celsius was my second choice and will probably be the first place I look if the community doesn’t tell me there’s a better option today.