The FTX crisis also affected some Bitcoin and altcoin platforms. Due to uncertainty about FTX’s financial situation, BlockFi announced that it has suspended withdrawals. In addition, FTX US, the US arm of FTX, announced that transactions can be stopped in a few days. Here are the details…
Bitcoin platform BlockFi halts transactions
Crypto loan service BlockFi has announced that it will suspend services due to the ongoing collapse of FTX. On the evening of November 10, the company posted an update to its Twitter account stating that it would cease services. The company said it will restrict platform activity and pause customer withdrawals. It also asked users not to deposit funds into their wallets or interest accounts. But he did not openly say that the deposit will be disabled. BlockFi used the following statements:
We were shocked and appalled by the news about FTX and Alameda. Like the rest of the world, we learned about this via Twitter.
— BlockFi (@BlockFi) November 11, 2022
cryptocoin.com As we reported, over the past few days it has emerged that a significant portion of Alameda Research’s assets are tied to FTX’s FTT token rather than traditional assets. This controversy sparked a bankruptcy panic at FTX. To gain funds and hedge against further losses, FTX would enter into a buyout deal with Binance. But when Binance looked at FTX’s financial ledger, it said they “won’t be able to fix the situation” and withdrew from the deal.
There is also uncertainty for FTX US
The effects of the failed deal continue today, with CEO Sam Bankman-Fried admitting to failure. BlockFi indirectly referred to these events as the reason for the suspension of its service. “As the status of FTX.com, FTX US and Alameda is unclear, we are unable to run things as usual,” he wrote. The company stated that it will provide updates on the situation.
BlockFi has not made it clear whether it is financially affiliated with FTX or its related companies. Earlier this week, BlockFi COO and co-founder Flori Marquez said that the company has a $400 million loan from FTX.US, not FTX. It’s unclear if BlockFi has any other exposure.
Meanwhile, things seem to be getting worse for FTX’s US arm, FTX US. According to the information on the exchange’s website, transactions in FT US can be closed for a few difficulties. In the statements made, “Please close the positions you want to close. Withdrawals are now open. We will report the developments”.
BlockFi’s competitor “closely” escaped
Meanwhile, rival crypto lending firm Nexo said on Tuesday it narrowly recovered from losses from the collapse of FTX. Nexo withdrew certain balances just before FTX’s collapse and it’s still running as usual. FTX and its international companies are also limiting activity and blocking some withdrawals. This is due to significant financial shortcomings as well as regulatory issues.
