BlockFi announces withdrawal suspension amid the ongoing FTX crisis

After the collapse of the crypto exchange FTX, cryptocurrency lender BlockFi said it will be scaling back operations.

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After the collapse of FTX, cryptocurrency lender BlockFi said it will be scaling back operations.

In a tweet, the company explained that it has temporarily suspended withdrawals due to the “lack of clarity” surrounding the current status of FTX. Customers were also advised not to add funds to the company’s wallet or interest accounts.

More information would be made available “as soon as possible”, the firm added: 

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“We intend to communicate as frequently as possible but anticipate that this will be less frequent than what our clients and other shareholders are used to.”

On Thursday, the company’s official tweet came following the tweet on Tuesday by Flori Marquez, founder and COO of the company, stating that the company’s “all BlockFi products are fully operational,” and that it would remain a separate business until at least July next year. 

FTX’s planned acquisition of BlockFi 

Earlier it was revealed that cryptocurrency exchange FTX US would issue a $400 million credit facility to BlockFi as part of a partnership that would also provide FTX US the chance to acquire the company. Acquisition costs could be affected by a number of variables such that BlockFi had to have received permission from the SEC to provide a revenue-generating service in the United States, have $10 billion in client assets by the time FTX US exercised its option, and have a positive yearly revenue for BlockFi.

Under these conditions, FTX US would have to pay up to $240 million to acquire the financial company. BlockFi might have been sold for as cheap as $15 million if the conditions weren’t met.

As per a Twitter thread Marquez posted on Tuesday, she appeared to be referring to this transaction by stating that BlockFi was a “independent business entity” and pointing out that the lender’s agreement was with FTX US and not FTX international.

FTX, a global corporation affiliated to FTX US, has over $10 billion deficit in its records, casting suspicion on this deal.

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