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:
🚨 NEWS – The platform #BlockFi prepares for possible bankruptcy following the collapse of #FTX (Source: Wall Street Journal)
— 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associated legal entities that encompasses obligations owed to us by Alameda, assets held on FTX.com, and amounts not withdrawn from our line of credit with FTX.US.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.
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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.
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Source: BlockFi
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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