BlockFi halts withdrawals following FTX collapse

A cryptocurrency lending platform BlockFi announced yesterday that it would limit its operation and could not conduct business as effectively as before with FTX. It paused the customer withdrawals citing the lack of clarity about FTX’s current situation. The decision was taken after citing the liquidity crunch at FTX.

There has been a recent tweet by BlockFi that they are shocked at the collapse of FTX.com. Like the rest of the world, they are sad and unable to continue their usual business. However, due to the lack of sufficient clarity on the matter from the participants like FTX.com, FTX US, and Alameda, Crypto lender BlockFi has decided to check and limit their withdrawals amidst ongoing FTX crisis.

As per the statement, the company said that they found information about FTX’s current situation through Twitter and felt shocked, after which it decided to limit services on its platform until further notice. They further added that their priorities were always to provide their client’s safety and security and meet their needs.

BlockFi has requested its clients to avoid deposits on their platform, and in the meantime, the company resolves this matter. They have restricted all the activities on its platform. BlockFi cleared that FTX had previously informed them about the delay in transactions to November 14 instead of November 11 as Silvergate, its banking partner, was observing the federal holiday.

As per the previous announcement made by FTX, it was about to invest $250M in the blockchain platform to strengthen its balance sheet. But the financial crunch of FTX came with insecurity among users and the supporting platforms.

However, BlockFi clarified that their deal was not with FTX International but with FTX US. However, this deal became doubtful after the revelation that the Global company FTX, associated with FTX US, had about $10 billion doubtful, the unclear discrepancy in their records.