Update – BlockFi is going to cut its organisation and is exploring a Chapter 11 bankruptcy procedure to ‘resolve’ its current problems.
So reports business newspaper the Wall Street Journal, based on sources close to the interest rate platform. It is unknown how many layoffs will take place. There is a strong intertwining with FTX.US, the bankrupt company that provided BlockFi with a $400 million loan.
Exchanges and interest platforms are facing declining volumes and customers walking away due to greatly reduced trust in middlemen.
BlockFi shares with the world that they are in trouble. In a tweet, the cryptocurrency exchange writes that the hassle surrounding Alameda Research and FTX has also affected them.
“We are shocked and dismayed by the news from FTX and Alameda. (…) Given the lack of clarity and status of FTX.com, FTX.us and Alameda, we cannot run our business normally.”
Then the high word comes out:
“Until there is clarity, we will restrict activities on our platform, including pausing recordings as per our terms and conditions.”
— BlockFi (@BlockFi) November 11, 2022
Money frozen
Anyone who still has money on BlockFi should just hope they will (someday) see the full amount of it back here. It was previously known that the crypto lender had run into financial trouble. FTX came to the rescue with a loan.
Customers are requested to stop making deposits to the BlockFi Wallet or interest accounts. The company also states that they will announce more details at a later date.
Remarkably, just a few days ago, founder Flori Marquez tweeted that there was no foul play. She shared how BlockFi is an independent company with a $400 million loan from FTX.us. You can already feel it coming that this still causes ambiguity.
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
Rumours are circulating on Twitter that a bankruptcy board has been appointed. This soap opera will also undoubtedly be continued in the coming days.
Incidentally, it is nothing new that BlockFi is under the magnifying glass. Regulators in several US states have imposed fines for violating securities laws. In addition, a few months ago, it was revealed that the company had some $600 million in unsecured loans.
