BlockFi Pausing Withdrawals in Wake of FTX, Alameda Collapse

InfoNesia.xyz – The collapse of FTX continues to reverberate from coast to coast, with New Jersey-based exchange BlockFi—bailed out by FTX in June—notifying customers that it will be “limiting platform activity,” and California state regulators announcing a probe.

“We, like the rest of the world, found out about this situation through Twitter,” BlockFi wrote in a letter posted to the social media site late Thursday. “We are shocked and dismayed by the news regarding FTX and Alameda.”

pic.twitter.com/zNF1uP6evl

— BlockFi (@BlockFi) November 11, 2022

BlockFi says that given the lack of clarity on the status of FTX, FTX US, and Alameda, “we are not able to operate business as usual.” As a result, platform activity—including withdrawals—will be limited. The firm also discouraged customers from making deposits to hosted wallets and interest accounts.

While the BlockFi promised to communicate as frequently as possible, it acknowledged that it will be less frequent than its clients and stakeholders are used to.

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In July, BlockFi offered employees buyouts to reduce headcount after cutting 20% of its staff the month before. These buyouts came weeks after finalizing a $400 million loan and potential acquisition terms with FTX in June.

BlockFi claimed to have a strong balance sheet at the time, calling itself well-positioned for long-term stability.

“This credit facility agreement with FTX provides BlockFi with access to capital that further bolsters our balance sheet and platform strength,” BlockFi tweeted.