Crypto asset-backed loan company BlockFi announced a $52.5 million funding round, which includes a $2.5 million equity investment from digital currency and blockchain tech firm Galaxy Digital Ventures, according to TechCrunch. The loans are designed for cryptocurrency holders who need cash, but don't want to immediately cash out of their crypto assets, especially in the face of crypto volatility. Fifty million dollars of the capital round will be used to fund loans to BlockFi customers.
The company is a year old and joins similar companies, like U.K.-based Lendingblock, that are engaged in different forms of crypto lending. “A robust lending market is the keystone for financial systems and BlockFi’s institutional approach and deep lending expertise were key drivers in our decision to partner with them,” said Galaxy Digital Ventures Founder Mike Novogratz.
BlockFi said they’re a leader among crypto-lenders because of their “robust legal and compliance approach,” which affords them “the largest geographic coverage” in the U.S., in a statement. BlockFi includes founder Zac Prince, who has a background in consumer lending, and Rene van Kesteren, chief risk manager and a former Bank of America managing director.