BlockFi on limiting platform activities and customer withdrawals
Due to the liquidity squeeze that FTX has been going through, Blockfi, one of the top cryptocurrency lending platforms, stated on November 10 at 8:16 p.m. (ET) that it was restricting activity on its platform and suspending client withdrawals. According to the business, the primary justification for this decision was the “lack of clarification” regarding the exchange’s position.
The corporation stated in a statement that they learned about the FTX predicament through Twitter and were “shocked and appalled” by the evolution of this problem. Additionally, the business said it was curtailing its services until further notice since it could not carry on as usual.
When it all started?
It happened just a few days after BlockFi founder and COO Flori Marquez assured users on Twitter that all of the company’s products were fully operational on November 8 because they had a $400 million line of credit from FTX US, an independent company from the one that was experiencing a liquidity crisis.
BlockFi “shall remain an independent business until at least July 2023,” according to Marquez, is most likely referring to the agreement with FTX US that gave them access to the line of credit and gave FTX US the opportunity to buy BlockFi for a variable price up to $240 million.
What was the FTX’s deal?
In June, the business agreed to a $250 million credit line with FTX, which would be used to strengthen its balance sheet.
According to the terms of the contract, FTX has the option to buy Blockfi for up to $240 million. The business had lost $80 million as a result of exposure to the collapse of Three Arrows Capital, which had also reduced its workforce by 20% as a result of the cryptocurrency winter in June.
