You’ve been blocked

el Prof
June 7, 2022

BlockFi, a ‘crypto lending startup’ (most famous for its insane APYs or $100M SEC fine, depending on who you ask) is totally not a Ponzi, according to the founder who blocks everyone who makes that accusation. And it’s not a bank, according to its newly compliant Terms and Services. So what is it? Not a viable business, either, turns out, as it seeks to raise a down round valued at $1B. Sounds like a lot, maybe, but it’s 1/3 of what it was worth a year ago, and 1/5 of what they said it would be worth in advance of this round. Which raises the question, how much money do you have to throw into a volcano before you realize only the ashes will blow back in your face when it erupts?

In an ironic twist of fate, this is the very same company with whom I made my bones navigating crypto compliance laws years ago, while shilling digital ad and machine learning products at Google. I don’t mean to slander an old client, but it’s clear to me now I’m cursed to give good advice and watch it go unheeded for the rest of my life. There’s a lot can be said about me. But, being a full-time doomsday prophet and all, there’s on thing they can’t say: ‘You didn’t warn me.’ 

To be fair, there’s no doubt marketing crypto-related enterprises online without accidentally misleading consumers and/or committing fraud was, is, and will remain a tough needle to thread. (Don’t believe us, check the Sn0b floor price.) Regulations are already suffocating and will only get more stringent as time goes on. But, as it turns out, the way to stitch together a company with staying power in spite of them is not to close your eyes tight and pretend the government will go away. 

Try the same strategy with BlockFi, though? It just might work.

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