Crypto lending platform BlockFi raises over $52 million

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BlockFi, a company that provides loans to individuals and companies against their cryptocurrency holdings, has raised $52.5 million in funds during an investment round that was led by Galaxy Digital. The firm, which lends against Bitcoin (BTC) and Ether (ETH) assets, will use the money to expand outside of the US and to open up support for additional digital assets on the platform.

According to a report from Business Insider, the company currently offers services to persons and entities in 42 states in the US. It functions as a traditional bank, holding clients’ funds with a registered custodian and reporting performance of the loans to the major credit reporting bureaus. BlockFi hopes to begin offering its services in other states, as well as in additional countries.

BlockFi is also working on providing loans against other digital assets, as well as offering new services. It is reportedly considering debt and fixed-income investments, credit cards and lines of credit. As it prepares for new service rollouts, it has hired a former Bank of America executive, Rene van Kesteren, to be its chief risk officer.

This past February, the company attracted $1.55 million during a funding round that saw participation from Kenetic Capital, ConsenSys and SoFi. Kavita Gupta, managing partner of ConsenSys, has praised BlockFi’s model, saying that it could help to reduce the volatility seen in the cryptocurrency markets.

“This market needs access to debt beyond fragmented, short term margin trading options in order to reduce volatility, facilitate scale and put the financial infrastructure for this ecosystem on par with other asset classes,” explained Gupta.

Galaxy Digital was founded by billionaire and crypto investor Mike Novogratz. He is a former Wall Street heavyweight, having led the Latin American arm of Goldman Sachs. Galaxy Digital is a full service digital assets merchant bank that trades and manages cryptocurrency assets, as well as provides consulting services for blockchain startups. The company has invested in several projects, including High Fidelity, a virtual reality company, and AlphaPoint, which is building a platform for tokenized assets.

Novogratz said of BlockFi, “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.”