Cryptocurrency lending company BlockFi becomes the first in crypto to be eligible to offer interest bearing accounts for Washington state residents after it obtained a money transmitter license from the state.
The license will allow the company to offer its services, including trading and interest accounts. The latter will make the company the first to offer crypto interest-bearing accounts, the company told CoinGeek in a statement.
BlockFi has been operating in Washington already, having obtained a consumer lending license in the state. This allowed it to offer residents its crypto-backed loan product.
The MTL license is a big nod to BlockFi by the state, especially given its strict rules for financial services providers. As noted by Decrypt, Coinbase is the only crypto exchange to possess the license. The tough regulations have seen other prominent exchanges cease operations in the state. These include Kraken which called it quits in 2017 and ShapeShift.
In a blog post on leaving the state, Shapeshift attacked the state’s regulatory position, stating that it “endangers customers, stifles growth, and generates unnecessary frictional costs for young innovators. Worse, it does so for little to no gain for the State’s residents.”
BlockFi Chief Compliance Officer David Spack said the licensing process has been rigorous and took several months. The company underwent rigorous audits for anti-money laundering compliance. It also had to prove that it had surety bonds to cover redemption. Spack also revealed that Washington is just the first state, with BlockFi expecting many more states to grant them the necessary licenses to offer their suite of products.
As CoinGeek revealed earlier this year, BlockFi has grown tremendously, even during the 2018 crypto winter. In April this year, the firm grew its client base by 50%, the CEO Zac Prince revealed in an interview. Additionally, it had brought in $18 million worth of crypto in March, with the total amount held in its interest-paying accounts standing at $53 million then.
The New York-based company accepts crypto deposits which it then lends to institutional investors. It pays interest on the deposits. In September, BlockFi announced that its clients will no longer have to meet a minimum deposit amount to earn interest.
Editor’s note: This article has been updated.
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