BlockFi, a cryptocurrency-related financial service provider, announced via Twitter on Thursday that due to the downfall of FTX, they were incapable of conducting business as usual and had thus limited their activities.
According to their statement:
We are shocked and dismayed by the news regarding FTX and Alameda. We, like the rest of the world, found out about this situation through Twitter.
The company asserts that its top priority is the protection of its customers and assets. In response, they are pausing client withdrawals until there are more clarifications on FTX status. They also advised clients against depositing money into their wallets or Interest accounts.
Furthermore, they claimed they would provide additional updates as soon as possible. In the meantime, they also plan to stay in close contact with its clientele and other shareholders as often as possible.
Well, it’s not clear whether BlockFi has a financial stake in FTX, and it’s also not apparent whether the two companies have any other unspecified connections.
Earlier this week, Flori Marquez, Co-founder of BlockFi, highlighted in its tweet that “BlockFi is an independent business entity.” She also clarified that they have a $400 million line of credit from FTX.US, not from FTX.com.
BlockFi In Limbo As FTX Folds
FTX, one of the largest crypto exchanges, has been facing liquidity issues and allegations of misuse of funds over the last week. It was preceded by an unexpected rise in investors withdrawing funds from FTX after learning about the exchange’s potential risks.
Additionally, the price of FTX’s FTT dropped drastically, taking other cryptocurrencies, including the two most prominent coins, Ethereum (ETH) and Bitcoin (BTC), down with it. As of Wednesday afternoon, both two major currencies hit a two-year low.
The fall of FTX has caused panic in the crypto market. Cryptocurrencies and exchanges with exposure to FTT and FTX will continue to face crashing prices, financial difficulties, and other negative outcomes.
Therefore, investors are worried about what will happen to their assets on other exchanges because of the significant volatility and the large number of clients who are unable to withdraw their money from FTX.
However, a notice stating that trading may be paused on the platform in the next few days was put on FTX.US’s website on Thursday for users on the log-in screen. Users were instructed to cancel any open positions and were informed that withdrawals would not be affected.
Sam Bankman-Fried, the CEO of FTX, also announced on Twitter that the FTX.US exchange is “100% liquid,” which means customers may freely withdraw all of their deposited cash.
Nevertheless, reports from Bloomberg show that FTX has said they would need to file for bankruptcy- unless they get a bailout. The future of all three brands (FTX, FTX.US, and FTX International) is uncertain at the moment.
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