Due to its ties to FTX, rumors are growing around BlockFi’s probable bankruptcy. Back on the succession of difficulties experienced by the platform during this bear market.
BlockFi faces bankruptcy
While the full consequences of FTX’s collapse are yet to be defined, the cryptocurrency platform BlockFi risks becoming the next collateral damage of this story, with probable bankruptcy to come:
— Cryptoast – Bitcoin & Cryptocurrencies (@cryptoastblog) November 15, 2022
As of the end of last week, the platform had already suspended withdrawals, but while its entanglement with FTX was high, the difficulties seem to go deeper. In a press release, the company reveals that FTX’s inability to meet its obligations puts her in an uncomfortable position:
“Rumours that the majority of BlockFi assets are held at FTX are false. That said, we have significant exposure to FTX and associated legal entities that encompasses obligations owed to us by Alameda, assets held on FTX.com, and amounts not withdrawn from our line of credit with FTX.US. »
BlockFi also explains that the bankruptcy of FTX prevents the latter, at least for the moment, to honor the agreement that had been reached. Indeed, while BlockFi had already encountered difficulties this summer, FTX had come to his rescueas it has also done with other players in the industry.
👉 To go further – Find our guide to bear market strategies
Alyra, training to integrate the blockchain ecosystem ⛓️
A series of difficulties
Beyond the FTX deal, BlockFi has for the moment experienced a difficult bear market. First, his dealings with the Securities and Exchange Commission (SEC) led to him being fined $100 million. Later, BlockFi had played it safe by liquidating the position of Three Arrows Capital (3AC), during the bankruptcy of the investment fund. Then earlier this summer, the platform was then forced to part with 20% of its staff.
Bankruptcy is not certain at this time, and in his words, the company is currently working “to determine the best way forward“. But recent events show how quickly everything can change.
Moreover, according to the words of a spokesperson for the payment company Curve, reported to our colleagues at CoinTelegraph, the finetech is on the way to take over BlockFi’s crypto card programprovided by its intermediary Deserve:
“Terms are being actively negotiated between Curve and Deserve, but a sale or partnership, if accepted, is pending completion of the necessary checks. »
Be careful though, do not confuse the payment company Curve, what it is about herewith the decentralized finance (DeFi) protocol of the same name.
Thereby, the future of BlockFi remains to be confirmedand it is certain that the fallout of FTX will continue to be felt in the future on the ecosystem.
👉 Follow the FTX affair live thanks to our dedicated article
Join Experts and a Premium Community
Invest in your crypto knowledge for the next bullrun
Receive a summary of crypto news every Monday by email 👌
What you need to know about affiliate links. This page presents assets, products or services relating to investments. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky in nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.