Product
3.2 min read
In addition to limiting platform activity, BlockFi halts client withdrawals
Key points:
- Crypto lender BlockFi has halted customer withdrawals on its platform as part of a broader cap on platform activity following the FTX crash.
- Their statement was jumping from "everything is fine" to "withdrawals are closed".
- Kevin Paffrath, CEO of HouseHack, noted that Sam Bankman-Fried also had a similar reversal occur, in public comments before FTX's crush.
The company said in a Nov. 11 tweet that "the unclear status of FTX.com, FTX US, and Alameda" made it impossible to operate properly.
As such, it stated that platform activity was limited, pending further clarification of the evolving situation.
The company also asked customers not to make deposits into BlockFi wallets or interest accounts at this time.
— BlockFi (@BlockFi) November 11, 2022
Just a few days ago, BlockFi founder and COO Flori Marquez assured users on November 8 that all BlockFi products are fully functional as they have a $400 million FTX US line of credit, a separate subject from FTX that have a liquidity crunch.
@BlockFi is an independent business entity. We have a $400MM line of credit from https://t.co/rFQz2hySwu (not https://t.co/oVC3gZQ6lb) and will remain an independent entity until at least July 2023.
— Flori Marquez (@FounderFlori) November 8, 2022
Marquez's comment that BlockFi "will remain an independent entity until at least July 2023" may be referring to a deal with FTX US that gave them a line of credit giving FTX US the option to acquire BlockFi for a variable price of up to 2.4 billion dollars.
However, the latest development of FTX US, in which a banner at the top of the FTX US website says "trading of FTX US may stop in a few days", has raised questions about FTX's financial impact on them.
The crypto community wasn't happy with BlockFi's sudden language change, and just 12 hours ago it assured customers that "all crypto transactions, including withdrawals, will proceed as usual."
Kevin Paffrath, CEO of HouseHack and a YouTuber with 1.85 million subscribers, noted that Sam Bankman-Fried also had a similar reversal occur, in public comments before FTX's crush.
Blockfi 11 hours ago: withdrawals “will remain fully operational”
Blockfi 20 minutes ago: pausing withdrawals, can’t do business anymore.
This is why trusting institutions is tough… Sam Bankman-Fried says “everything’s fine,” now going bankrupt. https://t.co/q8GRAhXFgA— Meet Kevin (@realMeetKevin) November 11, 2022
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