BlockFi’s model is no different than my bank’s (BofA)— they use my money to make loans, charge the borrowers an interest rate around 11% APY, pay me 7.5%, and keep the 3.5% as their fee. BlockFi is able to charge a much higher interest rate on their loans than my bank because borrower demand for my USDC is greater than borrower demand for my USD.

I agree that Congress should study crypto before it legislates about crypto. But this nonsense about BlockFi is just silly.

BlockFi lends against crypto. They get high rates because no one else will lend against that collateral, not because idiots are willing to pay more to borrow USDC than to borrow USD. (If you can borrow USD, you can use them to buy USDC.) A loan to BlockFi is a loan to a pool of BTC, ETH, and LTC. Maybe that's a good idea, maybe it isn't. But it sure as hell isn't "just like" BofA.