PayPal co-founder and venture capitalist Peter Thiel is backing crypto trading and lending startup BlockFi in a new funding round of $30 million. The Series B offering was led by Thiel’s Valar Ventures with participation from Morgan Creek Digital, Avon Ventures and Winklevoss Capital.
The New Jersey-based firm, which reports $650 million in crypto assets on its platform, will use the funds to grow its team and expand its product line.
Last year, BlockFi launched an interest bearing account that allows investors to earn high interest on Bitcoin, Ethereum, Litecoin and stablecoins. But critics warn that such offerings carry significant risks amid a lack of regulatory oversight in the industry.
The firm is seeing impressive growth.
Zac Prince, co-founder and chief executive officer of BlockFi, says the company’s revenue increased by 20-fold since January of last year. The company currently offers an interest account, trading product and crypto-backed loans.
In a recent interview on CNBC’s Squawk on the Street, Prince highlights BlockFi’s status as a regulated company.
“We are regulated like traditional fintech companies. We have money service business registration at the federal level, and lending licenses and money transmission licenses at the state level…
There is more risk here versus a savings account with FDIC insurance or a traditional brokerage account with SIPC insurance, but you’re compensated for it with the high yields.”
Prince adds that since launching in 2017, BlockFi has never lost a penny in any of its lending activities.
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