BlockFi, a cryptocurrency lending platform, will implement a new withdrawal fee scheme on December 1. Users are irritated by the high prices and short notice.
BlockFi, a cryptocurrency lending platform, has implemented a new withdrawal fee scheme for its platform, much to the chagrin of its users. Beginning December 1, 2021, BlockFi will charge withdrawal fees for all assets. Users will only be able to make one free withdrawal per month, and the actual withdrawal fee will vary depending on the asset.
Ethereum, Chainlink, PAXG, Uniswap, and Basic Attention Token will be subject to the fees. Stablecoin withdrawals made via Automatic Clearing House (ACH) bank transfers will always be free; otherwise, after the first free transaction, you will be charged $50 per transaction. After the initial free withdrawal, Bitcoin and Litecoin transactions will be charged 0.00075 BTC and 0.001 LTC per transaction.
The withdrawal fees were implemented to account for “the persistently increasing transaction fees on the Ethereum network,” according to the company. It also stated that it has no intention of profiting from any withdrawal fees.
Still, the crypto community is outraged by the move, which it believes is unjust to the end user. Other platforms, such as Nexo, provide a broader withdrawal fee scheme, such as three free withdrawals per month on any asset.
Users also complained that a seven-day whitelisting period of withdrawal addressed is required before they can be enabled. This means that users who have not done so will be unable to make free transfers before the December 1 deadline.
However, the issue is exacerbated by the fact that withdrawal fees are charged in ETH, which is becoming increasingly expensive as the value of ETH rises. Many users are now considering switching to a decentralized platform and expressing their dissatisfaction with centralized ones.
Regulators are also putting pressure on BlockFi.
The crypto community’s reaction has been understandably and predictably outraged. Users on Reddit expressed their inability to pay the withdrawal fee, even with what they had earned up to that point. BlockFi apologized for the announcement’s short notice, but this did little to appease the community.
The Securities and Exchange Commission (SEC) of the United States is now focusing its attention on the lending platform, as the SEC considers whether its lending products accounts qualify as securities. The agency has not accused anyone of wrongdoing, but it is thoroughly investigating the situation.
The New Jersey Attorney General has also issued a cease and desist order to BlockFi, claiming that it has been funding its operations through the sale of unregistered securities. Only a few days later, the state of Vermont issued a similar directive to BlockFi.