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BlockFi BTC Giveaway Mix Up Partially Resolved, Refunds Roll In

2 mins
Updated by Kyle Baird
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In Brief

  • BlockFi receives partial refunds after botched promotional giveaway.
  • The lender mistakenly awarded users with BTC instead of fiat stablecoins.
  • BlockFi recently announced a bitcoin mining partnership with Blockstream.
  • promo

BlockFi has received some of its Bitcoin back after it accidentally sent users an excessive amount of the crypto during a giveaway.

BlockFi’s recent mishap of sending an excessive amount of crypto during a promotional rewards program has seen some reparation. The crypto lender revealed that partial refunding has occurred, as several clients have returned the funds. BlockFi claims that it’s still missing around $10 million of the total funds that were sent out mistakenly.

BlockFi offered its users a bonus in bitcoin during a promotional giveaway held in March, based on the percentage of volume traded. It was only on May 14 that BlockFi noticed the huge issue, as users were being sent BTC instead of fiat. Some of these rewards go into the hundreds, with one Reddit user showing a deposit of over 700 BTC.

BTC received from BlockFi: Reddit

Reportedly, less than 100 clients were given these payouts that they did not earn. Some of these clients have transferred the funds off of the platform. BlockFi has threatened legal action against those who do not comply with the request to return the funds.

Some users have had their withdrawals suspended, while those who did not participate in the giveaway also said that they have been affected by this. However, the company states that client funds are entirely safe.

The incident caused a stir within the crypto community. BlockFi has said that the outstanding amounts are only “a small fraction of the loss reserves that we plan for as part of our normal accounting policies.”

It has also apologized for the mix-up, saying that it would not happen again and that it had learned from its mistakes. In any case, there is going to be at least a few weeks of correcting this issue, and there’s no guarantee that BlockFi will get all of its BTC back.

BlockFi’s bitcoin mining partnership

BlockFi announced on May 18 that it was partnering with Blockstream in a strategic bitcoin mining partnership. Consequently, it deployed miners at a Blockstream mining facility in Georgia, USA.

The goal of the partnership for Blockstream is to diversify revenue streams and expand its services. BlockFi’s users, meanwhile, will have access to Blockstream’s mining services, which is beginning to tap into green energy as well. There have been a lot of reports in recent times about Bitcoin’s energy consumption, and companies and miners are taking that into account.

BlockFi acts as a bridge between traditional finance and the cryptocurrency market, offering lending and credit services. The company manages more than $15 billion in assets and has generated hundreds of millions in interest for clients, according to the Blockstream announcement.

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Rahul Nambiampurath
Rahul Nambiampurath's cryptocurrency journey first began in 2014 when he stumbled upon Satoshi's Bitcoin whitepaper. With a bachelor's degree in Commerce and an MBA in Finance from Sikkim Manipal University, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has helped DeFi platforms like Balancer and Sidus Heroes — a web3 metaverse — as well as CEXs like Bitso (Mexico's biggest) and Overbit to reach new heights with his...