Blockfi Pauses Customers Withdrawals, Cites ‘Lack of Clarity’ on FTX’s Status as Cause

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Cryptocurrency lending platform BlockFi has announced that it is limiting the operations of its platform and stopping customer withdrawals. The company issued a letter saying that the decision was due to a “lack of clarity” on the current status of FTX, which had previously announced a $250 million investment in the platform to bolster its balance sheet.

Blockfi Limits Platform Activity, Prevents Customer Withdrawals

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BlockFi, one of the leading cryptocurrency lending platforms, announced on November 10 at 8:16 pm (ET) it was limiting activity on its platform and as a result of the liquidity crunch being experienced by FTX. The customer was blocking the withdrawal. The company cited “lack of clarity” on the position of the exchange as the main reason behind the offer.

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in one Announcement, the company explained that they found out about the state of FTX on Twitter, feeling “shocked and disappointed” by the development of the issue. In addition, the company announced that it cannot continue operating normally, communicating that it is limiting its services until further notice.

the company has previously informed That transactions due on November 11 were due to be delayed until November 14, as its banking partner Silvergate Bank observed the Veterans Day federal holiday.

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Lastly, BlockFi said it would notify customers of further developments. The news follows statements made by BlockFi co-founder Flory Marquez. “All Blockfi products are fully operational,” Marquez tweeted November 8, 2022.”BlockFi is an independent business entity. We have a $400MM Line of Credit [FTX US] (not FTX.com) and will remain an independent entity until at least July 2023.” couple,


FTX Deals

The company secured a $250 million line of credit with FTX in June, which will be used to strengthen its balance sheet. On the fate of these funds, BlockFi co-founder Zac Prince said:

The proceeds of the credit facility are intended to be contractually subordinated to all customer balances in all types of accounts (BIA, BPY and loan collateral) and will be used as needed,

The agreement between the two companies gave FTX the option to acquire Blockfi for up to $240 million. The company, which also laid off 20% of its employees in June as a result of the crypto winter, also faces the risk of a collapse of Three Arrows Capital, losing $80 million.

What do you think about BlockFi’s halving in customer withdrawals? Tell us in the comments section below.

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Credit : news.bitcoin.com

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