Following the collapse of FTX BlockFi pauses withdrawals. The company said that it will be curtailing operations and unable to carry on business as usual.
BlockFi pauses withdrawals due to FTX’s collapse
The business announced in a tweet that it will halt client withdrawals due to the “lack of information” around FTX’s current status. Additionally, it warned customers against making deposits to their interest or wallet accounts.
“We will share more specifics as soon as possible,” the company said. “… 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.”
Just two days before, founder and COO Flori Marquez tweeted that “all BlockFi products are completely functioning,” adding that the company would remain autonomous at least through July of next year.
There’s a lot of action in the crypto markets today – something we have seen before and are used to managing. Deposits, withdrawals, trading and lending are all up and running. A few important points:
— Flori Marquez (@FounderFlori) November 8, 2022
BlockFi and FTX US announced their agreement to a transaction in July of last year, under which FTX US would give BlockFi a $400 million credit line and grant the cryptocurrency exchange the chance to acquire BlockFi. Various conditions would affect the acquisition’s price.
These conditions included BlockFi getting approval from the Securities and Exchange Commission (SEC) of the United States to run a yield-generating service there, accumulating at least $10 billion in customer assets by the time FTX US exercised its option, and earning a profit each year.
FTX US would have to pay up to $240 million to buy the lender if these conditions were satisfied. BlockFi might have been sold for as cheap as $15 million if the conditions weren’t met.
In her Twitter thread from Tuesday, Marquez seemed to be alluding to this transaction when she noted that BlockFi was a “separate business entity” and that the lender’s arrangement was with FTX US, not FTX international.
The fact that FTX, the international business connected to FTX US, has a $10 billion hole in its books appears to have cast doubt on this deal.
FTX has stopped accepting withdrawals and is currently the focus of state and federal investigations. Sam Bankman-Fried, the founder of FTX, claims that FTX US is fine, but the business said on Thursday that it might stop trading soon and recommended consumers to stop making deposits. In the end BlockFi pauses withdrawals.
How big is BlockFi?
BlockFi’s present headquarters are in Jersey City, New Jersey. It was founded in 2017. The main goal of this company is to expand access to banking services in areas where regular banking services haven’t been available. BlockFi has expanded into a multinational business with over 800 workers since its inception.
13 digital assets and many practical objects are available for purchase from BlockFi. Overall, it might be a wise choice for experienced cryptocurrency traders.
BlockFi provides mobile apps for iOS and Android as well as an online dashboard. Overall, trading on BlockFi is easy to understand and manage. On a PC, users who wanted to make a straightforward transaction would select the assets they wanted to trade from the table at the top of their screen.
Recurring trades are another option available to users with a BlockFi Interest Account. Trades can be scheduled to happen every day, every week, or on the first or fifteenth of the month. In comparison to rivals, BlockFi stands out thanks to its recurring trades feature.
For those used to using financial apps or an online brokerage account, the trading process is generally simple. Different user and platform security procedures are used by BlockFi. Users who register for a BlockFi account will need to confirm their identity in order to assist stop fraudulent behavior on the network. You’ll require a government-issued photo ID and some fundamental personal information to do this. Additionally, BlockFi provides optional two-factor authentication to further safeguard user accounts. Users are currently not required to use two-factor authentication, but it is recommended.