PayPal Co-founder Leads $18.3M Raise for Crypto Firm BlockFi

New York-based BlockFi, a provider of , has raised $18.3 million in Series A funding led by Valar Ventures, with participation from a host of other investors.
Valar is an early-stage venture-capital company led by PayPal co-founder Peter Thiel, who has been an active investor in fintech over recent years. The billionaire was an early investor in the UK money-transfer business TransferWise, as well as backing the German fintech startups N26 and Deposit Solutions.

Winklevoss Capital, Galaxy Digital, ConsenSys Ventures, Akuna Capital, Avon Ventures, Susquehanna, CMT Digital, Morgan Creek and PJC also contributed in the latest financing round.
“Outside of all the hype and volatility of the crypto trading markets, there are teams, like BlockFi, that are building the infrastructure to allow investing in digital assets to become mainstream. We are excited to help BlockFi build robust ‘picks and shovels’ for this emerging asset class,” said James Fitzgerald, general partner at Valar Ventures.
BlockFi offers interest-bearing deposit accounts
BlockFi is backed by billionaire Mike Novogratz’s Galaxy Capital, which last year raised nearly $58 million in various funding rounds. The Winklevoss twins’  is also providing custody of BlockFi accounts, which recently added digital asset insurance coverage.
The new investment will enable the firm to build out new products and expand its existing platform, which includes interest-earning accounts for Bitcoin and crypto-backed USD loans.
According to the company’s statement,  has attracted so far over $53 million in deposits from retail, corporate, and institutional crypto investors.
BlockFi launched its service earlier in March, offering loans to those who are interested in borrowing crypto, starting from $2,000 and go as high as $100 million, against bitcoin, ethereum or litecoin at a 4.5 percent interest rate.
While BlockFi is advertising 6.2 percent in annualized returns paid in Bitcoin or Ether, according to the product’s terms and conditions page, the company can modify the rate each month at its sole discretion.
The startup pays crypto deposits interest rates from 4 to 12 percent. However, the actual interest rate is set on a month-to-month basis and is based on a combination of rates BlockFi sees in the institutional cryptocurrency borrowing market.

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