Binance at war for BlockFi cards
Binance, together with Coinbase and Curve, are among the exchanges in pursuit of BlockFi credit card customers. A bidding war is expected to be settled within the next few hours.
Specifically, the smallest competitor of the three, Curve, is seeking some 87,500 BlockFi accounts. This is what can be learned from what Blockworks wrote on Twitter yesterday:
“SCOOP: Binance US, Coinbase, and Curve are in the hunt for BlockFi’s credit card customers, and a bidding war is expected to resolve within the next 72 hours.”
However, the question arises: will BlockFi customers still be interested in doing business with exchange platforms after the collapse of FTX?
BlockFi also in trouble after FTX’s plunge: Binance intervenes
BlockFi, the American fintech company that provides financial services to crypto investors, has suspended withdrawals in recent days. This is because it claims it is unable to operate at its best due to the lack of clarity on the still critical situation of FTX and Alameda Research.
Following last weekend’s precipitous collapse of FTX as a result of an article published in CoinDesk exposing Alameda Research’s balance sheet, any procedure to resolve the problem has so far proved unsuccessful. Thus, BlockFi is also on guard.
Indeed, several users on Twitter noticed that their BlockFi cards had stopped working in the last few hours. Apparently, BlockFi itself appears to have a hole in its balance sheet of about $800 million and is not believed to be heavily involved in negotiations to purchase its card resources.
Some sources have reported that a deal is expected within the next few hours and that most of the ongoing negotiations on the acquisition of BlockFi’s card assets are being conducted by the fintech services company Deserve, which runs the BlockFi program. Evolve Bank & Trust of Florida, the issuing bank.
Statements from Curve exchange and the fight against Binance and Coinbase
Curve, the Ethereum-based decentralized exchange (DEX) involved in the battle with Binance and Coinbase, has been quick to voice its opinion on the matter.
In particular, it appears from some sources that the company intended to continue offering cryptocurrency rewards, the distinctive feature of the BlockFi card, if Curve was successful in acquiring its customer base. Indeed, on its website, Curve lists ten tokens for which it offers crypto rewards.
However, in an e-mail statement, Curve said the following:
“What sets our offering apart is that Curve is not a centralized exchange and has no interest in being one. We issue a credit card with cryptocurrency rewards and earn with revenue and exchange interest; we are not trying to convert credit card customers into exchange customers.”
In addition, Curve added that given what has occurred in the last week following the FTX collapse, it will actively encourage its customers to self-custody their rewards. Curve’s intent has always been that it wants its customers to earn their rewards in cryptocurrencies. Thus, the exchange recommends moving them directly into their personal wallets.
When FTX had saved BlockFi
The difficulties BlockFi experienced in the last week following the collapse of FTX are not the only problems the company has faced in the last year. Indeed, BlockFi suffered greatly during the collapse of Three Arrows Capital, the cryptocurrency hedge fund that was condemned to liquidation last June.
As a result, there were associated collapses of lending rivals Celsius and Voyager, which undermined confidence in the cryptocurrency lending industry and caused BlockFi’s monthly revenue to drop from about $48 million earlier this year to only $15 million by August.
It was in this circumstance that BlockFi was rescued by the FTX exchange, which has since filed for Chapter 11 bankruptcy protection.
At the time, the struggling cryptocurrency lender BlockFi claimed to have signed definitive agreements, subject to shareholder approval, with cryptocurrency exchange FTX.
Specifically, they were agreements for a $400 million revolving line of credit that is contingent on all customer funds and an option to acquire BlockFi at a variable price of up to $240 million based on performance triggers.
BlockFi: what it is and how it works
BlockFi is a US fintech company that was founded with the intention of providing financial services to crypto investors, offering intrinsic qualities such as soundness and reliability. Indeed, among the various investment opportunities offered by the crypto world, BlockFi is the one that to date has the highest security system among those in existence.
More than one million customers use the platform to invest and earn interest with their crypto assets, and there are multiple institutional investors who use the platform, enhancing its prestige.
The operation of BlockFi is quite simple. People transfer their crypto for free from their Wallet to their Interest Account and automatically the system will credit every last business day of the month with the interest accrued up to that point.
Nothing new so far, except that the peculiarity of BlockFi lies in the interest accrued in Bitcoin. Indeed, the latter can be credited in Bitcoin or the investor has the option of changing to a different crypto type, although it must necessarily be among those supported by BlockFI.
In addition to the classic supported cryptocurrencies such as BTC and ETH, BlockFi has also introduced Solana (SOL), Cardano (ADA), Polkadot (DOT), Filecoin (FIL), Avalanche (AVAX), and Cosmos (ATOM).
Back to the list