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.
Nov 14, 2022 at 9:31 p.m. UTC:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/ZIIRQQBCCRFQVJQ2ZMPUF3CSDA.jpg)
"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.
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.
:format(webp)/downloads.coindesk.com/arc/failsafe/user/1x1.png)
Michael Bellusci is CoinDesk's crypto reporter focused on public companies and digital asset firms.
:format(webp)/s3.amazonaws.com/arc-authors/coindesk/fc717b58-77ad-4302-9330-38a32814e13b.png)
George Kaloudis was a research analyst and columnist for CoinDesk.