Hey everyone, in this episode we discuss the crypto platform BlockFi, and since recording it, a lot has happened in the news. As of today, November 15th, 2022, BlockFi is no longer allowing customers to withdraw their own crypto, so all users, myself included, are stuck in a very frustrating situation.

Needless to say, I'm not happy with the company and any recommendation you might hear for them in this episode should be ignored and considered outdated. Okay, on to the episode. A quick word from our sponsor today. I love helping you answer all the toughest questions about life, money, and so much more, but sometimes it's helpful to talk to other people in your situation, which actually gets harder as you build your wealth.

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Again, that's longangle, A-N-G-L-E dot com. Hello and welcome to a special episode of All The Hacks, a show about upgrading your life, money, and travel. So what's this special episode all about? Well, there was a lot in the news recently. A new quick and easy way to earn Southwest Companion Pass for a whole year, points devaluations from Hyatt and Marriott, and a big BlockFi settlement with the SEC.

So with all that happening, I thought it'd be worth doing an episode today to talk through it all, and I also just wanted to share some recommendations from my recent weekend vacation. So let's do it. First, I want to talk about the amazing deal going on right now with Southwest Companion Pass.

For those of you who don't know, Southwest Airlines' highest elite status is called Companion Pass, and it lets you name a person who can fly free any time you purchase a ticket, even if you pay with points. You just have to pay the taxes, and you can change your companion up to three times a year.

I've had Companion Pass a few times over the years, and I've used it to fly with my wife all over the U.S. to Hawaii, Aruba, Cabo, and though I know Southwest flies to Turks and Caicos, I'm pretty disappointed we never got to use it there. Anyways, Companion Pass has to be one of the best travel hacks out there, and it's never been easier to get than it is right now.

And that's because for all three Chase Consumer Southwest cards, that's their Plus, Premier, and Priority cards, if you spend $5,000 in the first three months, you get Companion Pass through February 28th, 2023. And if you're interested and you want to help me and the show out, you can sign up for any of those cards at allthehacks.com/southwest.

Oh, and you get 30,000 Southwest points after spending $5,000, which means you'll end up with about $500 worth of points and Companion Pass. I don't know how long this offer will last, and honestly, if we weren't having a baby in June, I'd 100% be getting this card. Okay, moving on to some less exciting news in the points world, Hyatt is making some changes that on the whole aren't that great.

Specifically, 70 of their hotels are moving to a higher award category, meaning you're going to need to use more points each night to book them. While this might seem like a pretty small number of properties, and it is, it just happens to be some of their best properties, places like the Ventana in Big Sur, the Andaz in Maui, and Park Hyatts in Kyoto, Paris, Sydney, and other cities around the world.

So that sucks, but the silver lining is that even with these changes, compared to other hotel programs, Hyatt's award chart is still so generous, and the most you're going to have to pay for their highest tier of luxury hotels is only 35 to 45,000 points a night. Yes, that might be 30% more points than before, but it's still pretty good.

And if you're looking at what that same number of chase points would get you booking in their portal, since Chase and Hyatt are transfer partners, it'd only be 500 to 675 bucks. Yes, that's expensive for a hotel night. In fact, I'm not even sure I've ever spent that much on a hotel night, but many of these properties regularly go for well over a thousand dollars a night, so it still can be a great deal.

Okay, so it always sucks when your points are worth less, but I know I'll still be transferring chase points to Hyatt to book these amazing hotels around the world. And this change looks like nothing compared to what's coming for Marriott. For anyone who missed it, starting sometime in March, Marriott is moving to a dynamic pricing system where the points you need per night will fluctuate with the market rate for hotels.

That effectively means that amazing deals in places like Bora Bora or the Maldives will probably be gone forever. Now, despite the change coming next month, Marriott did say that most of their hotels won't cost more than their peak pricing in 2022. But one, what does most mean? It seems pretty vague to me.

And two, come 2023, it's game over. In next week's episode, I'm joined by Points and Miles expert Richard Kerr, and we're going to talk a bit about what's going on with Marriott, so definitely tune in for that. What's my takeaway? Well, I was a dedicated Starwood traveler and transitioned that loyalty to Marriott since they merged.

But honestly, I think I might be going all in on a transition to Hyatt this year. To be fair, we're having a baby in June, so all in doesn't really mean that much. I might only have a dozen nights all year, but I probably want to start making that transition sometime, so I might as well start now.

Next, I want to talk about BlockFi. I think you all know I'm a huge fan. I have a lot of money in my BlockFi account and they're a sponsor of the show, so I feel like I have to address their big news this week. But before I do, I want to clarify that everything I'm saying is my own opinion.

I haven't consulted with BlockFi on it, and they certainly didn't ask me to talk about this. Okay, so the main headline is that BlockFi has agreed to pay $100 million in a settlement with the SEC and state regulators over their high-yield interest account. And they have finally been provided with some clarity on a path forward to offering their product in a compliant way.

There's a lot more context to that, so I'll link to everything in the show notes. But in my opinion, this is pretty good news for the crypto industry and the future of these products. But what about in the short term? Well, in the interim, they're going to be halting all interest account opening for new customers and preventing all existing customers from making any additional deposits.

However, any existing balances you have right now will continue to earn interest. As part of this process, they're going to be registering their new high-yield product, BlockFi Yield, with the SEC in line with this new guidance they've gotten, and they're going to plan to make it available soon, and all BlockFi interest accounts today will convert over to BlockFi Yield accounts.

But they haven't provided much more clarity than that. If you're not in the U.S., good news. You can continue to sign up and make deposits as you want. This whole thing reminds me a lot of how Uber, Lyft, and Airbnb were operating in a gray area and chose to just keep going and launching their products, even though they weren't sure whether they were allowed, or in some cases, thought they weren't but thought they might get away with it.

Except the difference here is that the SEC seems to take things a bit more seriously than local regulators. Well, in BlockFi's case, they weren't sure whether they needed to register their product as a security, and best I understood, they even sought guidance from regulators but never got a clear answer until they started getting some cease and desist.

Fortunately for them, they tried their best to play by the rules, and regulators actually let them continue their operations until they could agree on a plan going forward, and this is that plan. I do want to clarify they did also make some misrepresentations about the degree to which their loans were over collateralized, meaning if someone was borrowing against their Bitcoin, how much more Bitcoin did they have than the amount they were borrowing, but given how often financial firms are fined for making these misrepresentations, a hundred million dollars seems quite egregious, and while misrepresenting things is never good, fortunately those misrepresentations never ended up affecting consumer deposits.

But one more thing that I think is really fascinating is that despite this ruling from the SEC, one of the four SEC commissioners actually published an interesting letter in dissent on the SEC website that I just want to read a few excerpts from because I think it speaks a lot to the current state of our financial regulations.

So this is from Commissioner Hester Pierce, "Lurking behind the legal analysis, however, is an important question. Is the approach we're taking with crypto lending the best way to protect crypto lending customers? I do not think it is, so I respectfully dissent. As an initial matter, it is difficult to understand how the civil penalty will protect investors.

BlockFi will pay the SEC 50 million and will pay another 50 million in connection with state settlements for the same conduct. While penalties this size are intended to deter bad conduct, here there is no allegation that BlockFi failed to pay its customers the money due them or failed to return the crypto lent to it.

BlockFi's misrepresentations about over-collateralization are serious, but the combined $100 million penalty nevertheless seems disproportionate." I won't read the entire thing, but it ends with, "Working with an earnest desire to reach a prudent, properly calibrated regulatory outcome is important for a number of reasons. First, these products matter to people.

A program that allows people, and not just affluent people, to keep their crypto assets while still earning a return is valuable to many Americans, as evidenced by the program's popularity in the United States to date. The investor protection objective of today's settlement will be poorly served if retail investors are ultimately shut out from the participation of these products.

Second, our process speaks volumes about our integrity as a regulator. Inviting people to come in and talk to us, only to drag them through a difficult, lengthy, unproductive, and labyrinthine regulatory process casts the Commission in a bad light and thus makes us a less effective regulator. Third, a company that tries to do the right thing should be met across the table by a regulator that tries to get a sensible result in a reasonable timeframe.

For the sake of the American public, our own reputation, and the companies that heed our call to come in and talk to us, we need to do better than we have so far at accommodating innovation through thoughtful use of the exemptive authority Congress gave us." Wow. So respect to Hester for such a bold statement and to the SEC for allowing her to publish it on the website.

As for what I'm doing with my BlockFi account, my money is staying put and I'm excited for the launch of the BlockFi Yield account when I can continue adding deposits. Okay, finally, I want to wrap up with a recap and some recommendations from the quick trip Amy and I took down to Oceanside, California last weekend.

I'd never even heard of Oceanside, but when I was trying to figure out how to use my $200 hotel credit for my platinum card, I stumbled upon what looked like a cool hotel called The Seabird, and boy was I glad I did. So for those of you who don't know, Oceanside is about 45 minutes north of San Diego and 45 minutes south of Orange County, so you can fly to either and just rent a car or take a lift.

It's a small California beach town that was exactly what we needed for a weekend away while my parents were watching our daughter. We stayed at The Seabird, and honestly, I couldn't recommend it enough. It's a Hyatt property, so you can book it with points, or it actually wasn't that expensive when we paid in cash, well, with a card, you know what I mean, and if you have access to Amex's fine hotels and resorts, you get free breakfast, $125 hotel credit, late checkout, and a room upgrade.

The food was great, the pool deck wasn't too crowded, and Amy used that $125 for a massage at the spa that she said was one of the best she's ever had. Honestly, it is such a great hotel and I am certain we'll be back. As for Oceanside, we spent most of the weekend eating, drinking, relaxing, hanging by the pool, and walking on the beach.

It was exactly what we needed, and the food was fantastic. If you go, definitely check out Craft Coast Brewery for amazing tacos and great beers. Just make sure to get all the tacos Craft Coast style. Also, Carte Blanche for French-inspired Mexican. Their Caesar salad had this chili Caesar dressing that was so good and spicy.

And finally, the Switchboard for Hawaiian-Korean fusion and great cocktails. Shout out to my friend and colleague, Mark Ryden, who lives in Oceanside, for all these recommendations. So, to wrap, don't forget that if you want to get in on the Southwest Companion Pass deal, head on over to allthehacks.com/southwest. And this episode is another experiment, so please don't expect a two-a-week to be the norm.

But if you like hearing this kind of a short recap episode, or if you don't, just let me know. You can DM me on Twitter @hutchins, or on Instagram @chrishutchins, or just shoot me an email, chris@allthehacks.com. All right. Thank you so much for listening. See you next week. I want to tell you about another podcast I love that goes deep on all things money.

That means everything from money hacks to wealth building to early retirement. It's called the Personal Finance Podcast, and it's much more about building generational wealth and spending your money on the things you value than it is about clipping coupons to save a dollar. It's hosted by my good friend, Andrew, who truly believes that everyone in this world can build wealth, and his passion and excitement are what make this show so entertaining.

I know because I was a guest on the show in December 2022, but recently I listened to an episode where Andrew shared 16 money stats that will blow your mind, and it was so crazy to learn things like 35% of millennials are not participating in their employer's retirement plan.

And that's just one of the many fascinating stats he shared. The Personal Finance Podcast has something for everyone. It's filled with so many tips and tactics and hacks to help you get better with your money and grow your wealth. So I highly recommend you check it out. Just search for the Personal Finance Podcast on Apple Podcasts, Spotify, or wherever you listen to podcasts, and enjoy.