Compare BlockFi vs Coinloan

In order to earn interest on BlockFi you must transfer funds from your BlockFi wallet to your BlockFi Interest Account. This means that when you want to make a withdrawal from an interest account you must first transfer your funds to your BlockFi wallet and then make a withdrawal request. This adds a minor amount of inconvenience but no significant delay to the withdrawal process.

Withdrawals from your BlockFi wallet are processed the next US working day. Requests made before 00:00 UTC will be processed the next day, requests made after this time will be processed in two working days time. This means that from the time of making a withdrawal request you could typically be waiting 24 hours before the request is actioned. BlockFi claim that this delay is for security reasons as it allows time for withdrawals to be reversed if necessary.

Withdrawals are only processed on US working days. This means that if your withdrawal request was submitted during a weekend or public holiday then you could be waiting even longer to get your funds.

Some withdrawals are subject to additional fraud checks. If the withdrawal gets flagged then BlockFi may ask for further confirmation of the withdrawal.

You get one free crypto withdrawal per month, after which a withdrawal fee is charged. These withdrawal fees can be quite high, for example the withdrawal fee on most stablecoins is $50 USD.

As an additional security measure you can whitelist withdrawal addresses, which means that only those addresses can receive funds.

Overall BlockFi has adopted a very strict withdrawal process, which should provide protection against fraudulent withdrawal requests. However the long withdrawal time and high withdrawal fees have attracted many complaints from users.

If your funds are invested in a Coinloan savings account and you want to withdraw them from the platform you must first make a withdrawal request from the savings account back to to your Coinloan wallet. These withdrawals from savings accounts are not instant. Savings account withdrawals are processed every day at 14:00 UTC. This means you could be waiting up to 24 hours for your withdrawal request to be actioned.

Once funds have been returned to your Coinloan crypto wallet you can then apply for these funds to be withdrawn from the platform altogether. These withdrawals are normally completed swiftly. In our tests they were completed in under an hour.

Fiat withdrawals from Coinloan are processed during business hours only and may take up to 24 hours to be processed. From the time of processing it could take up to 3 further business days for the funds to clear the banking system and arrive in your bank account.

Minimum withdrawal amounts apply, which are around $50 USD for most cryptocurrencies, 10 EUR for SEPA fiat transfers and 5,000 EUR for fiat swift transfers. There is also a maximum daily withdrawal limit of $500k USD for all currencies. You can request for this withdrawal limit to be increased.

BlockFi implements the usual security measures to protect assets held in your crypto wallet. These assets are secure by a third party custodian, Gemini. It is likely that BlockFi has some level of insurance against loss of these assets, but we have not been able to confirm that this insurance exists or what level of cover is provided. The BlockFi app utilises two factor authentication and biometric face id. Users can enable crypto wallet address whitelisting so that funds can only be withdrawn to accounts that you have previously approved.

BlockFi provides extensive detail on its investment strategy for funds which are deposited in a BlockFi savings account. These activities including lending to retail and instutional clients. BlockFi state categorically that "they may ... lend, or invest ... assets without retaining in our possession a like amount of digital assets". This is somewhat concerning as it suggests that some loans made by BlockFi may not be fully collateralised. Full loan collateralisation is important as it means that the loan can always be repaid by using the collateral in the event of a default by the borrower. Having said this, BlockFi provides a detailed breakdown of how it manages loan risk, including its current allocations and credit risk methodology. A well managed credit risk strategy will allow BlockFi to generate higher savings rates for users.

BlockFi is very transparent on the measures it takes to ensure sufficient liquidity remains on the platform to service user withdrawl requests. It keeps 10% of client deposits readily available on hand at all times to service immediate requests. It aims to keep 50% of deposits either on hand or in loans that can be called in with in 7 days. It aims to keep 90% of deposits either on hand or in loans that can be called in within 1 year.

BlockFi does not provide a public audit of its reserves, although it does provide a snapshot of its financial assets here. Proof of reserves can provide significant reassurance to deposits as it is typically undertaken by a third party and it proves that the platform holds more assets than customer liabilities (i.e. it is in a position to be able to repay all users if necessary).

On the technical security front, Coinloan employs the usual two factor authentication 2FA approach to account security, which makes accessing an individual account extremely difficult without also being in possession of the 2FA device. In addition to this, Coinloan have employed Blaze to undertake a third party security audit of Coinloan to check for potential vulnerabilities. Blaze were "very impressed with CoinLoan’s initial security standards", and have proposed further enhancements to the security of the platform. Coinloan do appear to be committed to maintaining a high level of technical security on their platform.

Coinloan adopt a conservative, risk adverse strategy to investing funds in order to generate yield. They state that they adopt market neutral investment strategies that do not depend on the overall price trend of the market. Such strategies would include arbitrage and spread trading. Such strategies are good news for depositors as it makes the platform less susceptible to liquidity issues, when a platform can be unable to repay to depositors because too much money is tied up in loans.

Coinloan categorically state that they do not invest in DeFi protocols as they see them as too risky and all loans are fully collateralised. This collateral can be used to repay the loan in the event of a default by the borrower. They also state they avoid futures orders and other financial products that may lead to margin calls or position liquidation.

Some crypto platforms have employed third party auditors to verify their financial reserves. This proof of reserves provides reassurance to the depositors that funds are available if they need to make a withdrawal. Coinloan do not currently provide proof of reserves.

Coinloan have provided further details on their investment strategy in a detailed blog post. The transparency displayed is reassuring.