BlockFi Admit Significant Exposure to FTX But Denies Custody For Majority of Its Assets.
BlockFi announced today on its website that withdrawals remain paused due to the fallout of the demise of FTX.
Denies the Rumour
The company denied rumors that the majority of its assets were based at FTX. However, BlockFi acknowledged its significant exposure to FTX and associated corporate entities, which include obligations owed to us by Alameda, assets held at FTX.com, and amounts that remain undrawn from the FTX US credit line.”
“The rumors that a majority of BlockFi assets are custodied at FTX are false. That said, we do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US,” cited the letter.
As a result of BlockFi’s exposure, it assured clients that it had “the liquidity to explore all options” and that it is consulting experts on how to proceed.
“BlockFi has the necessary liquidity to explore all options and we have engaged expert outside advisors that are helping us navigate BlockFi’s next steps.,” according to the letter.
BlockFi Users Questioning Their Withdrawals before the announcement
Due to this, BlockFi has paused withdrawals and also requested customers not to deposit funds into their accounts.
Therefore, BlockFi users are unable to withdraw or deposit funds at a time when all centralized exchanges and crypto brokers are under scrutiny.
BlockFi users were complaining on Twitter about pending withdrawals before the announcement.
“WHAT ABOUT THE PENDING PROCESSED WITHDRAWALS THAT WERE MADE PRIOR TO THE ANNOUNCEMENT!! WHEN ARE YOU GOING TO HONOR THEM?!!!,” said one twitter user.
— Nelson Menezes (@nellyG444) November 14, 2022
Similar question also sent by another user, “@BlockFiSupport Are you going to clear your backlog of pending requests that were made before the withdrawals were suspended? They should be. Do what is right for your customers that trusted you with their money.”
However, the firm has not given any information regarding this pending withdrawal issues.