BlockFi suspends withdrawals as fear of insolvency and liquidity crunch spreads across crypto markets
While all eyes are on the collapse of FTX, another storm is brewing at BlockFi, a distressed crypto exchange that FTX bailed out in June with a $250 million revolving credit. Now, BlockFi is again fighting for its survival and its future remains uncertain.
BlockFi announced late Thursday in a post on Twitter saying:
“Until there is further clarity, we are limiting platform activity, including pausing client withdrawals.”
BlockFi also wrote that it had learned about the FTX collapse via Twitter. “We are shocked and dismayed by the news regarding FTX and Alameda,” BlockFi said on a Thursday. “Given the lack of clarity on the status of FTX.com, FTX US, and Alameda, we are not able to operate business as usual,” it added, saying its priority is to protect its customers and their interests.
— BlockFi (@BlockFi) November 11, 2022
Just a day before, BlockFi founder and COO Flori Marquez had tweeted that “All BlockFi products are fully operational. BlockFi is an independent business entity. We have a $400MM line of credit from FTX.US (not FTX.com) and will remain an independent entity until at least July 2023. We are processing all client withdrawals.”
Founded in 2017 by Zac Prince and Flori Marquez, BlockFi is a provider of cryptocurrency-focused financial products, including zero-fee trading and interest-bearing accounts. The company started lending in January 2018, the company offers the ability to leverage Bitcoin and Ether to obtain USD loans.
BlockFi operates in over 44 U.S. states and is backed by leading investors including Galaxy Digital Ventures LLC, ConsenSys Ventures, and SoFi. BlockFi is a secured non-bank lender that offers USD loans to crypto-asset owners who collateralize the loan with their crypto-assets. Our products bring additional liquidity to the blockchain asset sector and meet the needs of both individuals and institutions holding blockchain assets.