BlockFi limits platform activity, including stopping client withdrawals

Crypto lender BlockFi has halted client withdrawals on its platform as part of a wider limit on platform activity in the wake of FTX’s collapse.

The company said in a Nov. 11 tweet that a “lack of clarity about the status of, FTX US and Alameda” has prevented it from being able to operate as normal.

As a result, it has limited platform activity until there is further clarity on the development situation, it said.

The firm has also requested that clients not make deposits to BlockFi wallets or interest accounts at this time.

It comes just days after a Twitter thread in which BlockFi founder and COO Flori Marquez assured users on Nov. 8 that all BlockFi products were fully operational, as they have a $400 million line of credit from FTX US, which is a separate entity from one affected by a liquidity crisis.

Marquez’s comment that BlockFi “will remain an independent entity until at least July 2023” is likely a reference to the agreement with FTX US that gave them the line of credit, in which FTX US was given an option to buy BlockFi for a variable price up to $240 million .

However, recent developments from FTX US, where a banner at the top of the FTX US website said “trading may be suspended on FTX US in a few days”, has raised questions about the financial impact the fallout of FTX has had on the US. arm.

Related: FTX US withdraws from the Crypto Council for Innovation

The crypto community has not taken kindly to the abrupt change in language coming out of BlockFi, which had just 12 hours earlier insured customers that “all crypto transactions, including withdrawals, would continue as normal.”

Kevin Paffrath, CEO of HouseHack and a YouTuber with 1.85 million subscribers pointed out a similar u-turn in Sam Bankman-Fried’s public comments ahead of the FTX fallout.