BlockFi has ceased temporary withdrawals from its platform following FTX’s collapse as part of a wider limit on activity.
Unclear Status of FTX Resulted in the BlockFi Withdrawals Limitations
In a tweet on Nov. 11, the company said it was unable to operate normally due to the unclear status of FTX.com, FTX US, and Alameda.
“ 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. Given the lack of clarity on the status of FTX.com, FTX US and Alameda, we are not able to operate business as usual.
Our priority has been and will continue to be to protect our clients and their interests. Until there is further clarity, we are limiting platform activity, including pausing client withdrawals as allowed under our Terms. We will share more specifics as soon as possible. We request that clients not deposit to BlockFi Wallet or Interest Accounts at this time.
We intend to communicate as frequently as possible going forward but anticipate that this will be less frequent than what our clients and other stakeholders are used to,” cited in the tweet.
— BlockFi (@BlockFi) November 11, 2022
News Comes After BlockFi COO Claimed All Products Were “Fully Operational”
This comes just days after the BlockFi founder and COO Flori Marquez claimed on Twitter on Nov 8 that all BlockFi products were fully operational, since FTX US, a separate entity from the one suffering from liquidity issues, had provided $400 million in credit for all BlockFi products.
“@BlockFi is an independent business entity. We have a $400MM line of credit from http://FTX.US (not http://FTX.com) and will remain an independent entity until at least July 2023,” said Marquez on Twitter.
This news was also followed by various reactions and responses from the community, including questioning the decision “protecting our clients by not allowing them to withdraw,” one user commented on the post.
> protecting our clients by not allowing them to withdraw
— dappdavid (@dappdavid99) November 11, 2022
Read More: Companies with The Biggest Exposure to FTX
Meanwhile, another user also shared his speculation, “That’s exactly what’s happened though, they’re now stopping withdrawals precisely because there’s precious little left in the vault to withdraw. Granted there could be 10 cents on the dollar, but the big accountancy firm handling the pending bankruptcy will take all that in fees.”