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Crypto Lender BlockFi Updates Users on Platform, FTX Exposure
The company denied rumors that a majority of its assets are custodied at collapsed crypto exchange FTX.
"We can no longer operate our business as usual," said BlockFi in a letter to customers viewed by CoinDesk.
With FTX and all of its affiliates now in bankruptcy proceedings, said the company, the "most prudent" move for now is to pause many platform activities. Withdrawals will continue to be on pause, said BlockFi, which also asked customers not to submit any deposits.
STORY CONTINUES BELOW
As for chatter that all or even a majority of BlockFi's assets were held in custody – and therefore tied up for potentially a long time and perhaps even unrecoverable – the company said that is false. BlockFi, however, did acknowledge "significant exposure" in the form of obligations owed to BlockFi by Alameda, assets on the FTX platform, and an undrawn credit line from FTX.
Read more:Crypto Lender BlockFi Pauses Withdrawals in Wake of FTX Collapse
Michael Bellusci
Michael Bellusci is a former CoinDesk crypto reporter. Previously he covered stocks for Bloomberg. He has no significant crypto holdings.
George Kaloudis
George Kaloudis was a senior research analyst and columnist for CoinDesk. He focused on producing insights about Bitcoin. Previously, George spent five years in investment banking with Truist Securities in asset-based lending, mergers and acquisitions and healthcare technology coverage. George studied mathematics at Davidson College.
