• FTX collapse brings down cryptocurrencies
• BlockFi received a cash injection from FTX before the crash
• BlockFi is stopping customer payments and asking for patience
Bankruptcy of crypto service FTX This has sent shockwaves throughout the cryptoverse and put many digital currencies under severe pressure. Above all, it was also evident from the native cyber currency bitcoin, which fell to a 52-week low of US$15,871.2049 on 9 November. Since then, the digital coin has recovered only marginally. The memory of the Terra/Luna debacle a few months back, which caused a massive cryptocurrency collapse, is too fresh.
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Blockfi next victim after FTX bankruptcy?
There is now concern in the area that other crypto exchanges may meet the same fate as FTX. So what is the crypto lending service BlockFi. The company gained notoriety as a crypto exchange that attracted investors with loans and low interest rates. However, the exchange came under considerable pressure during the crash as a result of the collapse of the algorithmic stablecoin Terra and other cryptocurrencies.
FTX rushes to BlockFi’s aid after Terra debacle
Interestingly, it was then-FTX boss Sam Bankman-Fried who gave BlockFi a $250 million cash injection He arrived to help the company “operate from a position of strength,” as he tweeted at the time. However, at that time the capital grant was not only used for philanthropic purposes, but was also aimed at re-stabilizing the crypto sector as a whole. Shortly after, FTX also secured the BlockFi option up to $240 million to take completely.
BlockFi is stopping customer payouts
As the FTX bankruptcy shows, however, the intention was not crowned with success, which is why even BlockFi investors now have to fear for their money. The company recently announced via Twitter and its own website that the crypto platform’s activities will be restricted due to the current circulating news situation regarding FTX and Alameda (a trading company Bankman-Frieds). This also includes the fact that customer payments are now on hold. Furthermore, BlockFi also asks investors not to deposit.
— blockfi (@blockfi) November 11, 2022
In the announcement, the company is very concerned about the FTX bankruptcy: “We are shocked and horrified by the news of FTX and Alameda. Like the rest of the world, we learned about this situation via Twitter. Due to the lack of Due to the situation surrounding FTX.com, FTX US and Alameda, we are unable to continue operating as previously.” However, the topmost priority is to protect the customers and their interests. BlockFi will continue to keep investors up to date with the latest developments, but warned that this is likely to happen “less frequently than our customers would like”.
So it remains to be seen whether BlockFi will still manage to get its head out of the noose or FTX will become the next victim of bankruptcy.
Editorial officefinanzen.net
Image source: T. Schneider / shutterstock.com, Witt Olszewski / shutterstock.com
