By
Mayowa Adebajo
April 11th, 2024
BlockFi said the rumor is not entirely true and issued a statement to clarify the situation on the ground.
Crypto lender BlockFi was recently named as one of many firms that may be directly hit by the collapse of giant exchange FTX. The rumours have it that a large percentage of its assets were on FTX before the collapse. However, BlockFi has now attempted to put the rumours to bed by issuing an official statement to its clients.
BlockFi Debunks Rumors, Shares Recovery Plan
According to the statement, BlockFi truly has a reasonable amount of exposure to FTX and some of its affiliates, but not the “majority” as the rumors being spread suggest. Furthermore, the lender also assures clients that it is nowhere near exploring all possible options and that talks are ongoing with experts in that regard.
Meanwhile, despite the assurances from the crypto lender about “recovering all obligations owed to BlockFi”, it is not oblivious to the fact that the process will not happen in an instant. Especially considering that FTX has just initiated its bankruptcy process as well.
Investor Fears Continue to Grow as Client Withdrawal Remains Halted
Meanwhile, many investors, including BlockFi clients, have been thrown into a frenzy over fears of contagion from FTX’s woes. Rightly so, however, considering the number of firms that went bankrupt following the Terra crash in May.
Recall also, that earlier reports suggest that BlockFi halted client withdrawals on its platform shortly after FTX’s collapse. At the time, it stated that its business could not go on as usual in the face of all the uncertainties surrounding FTX.com. Even after, the lender also revealed that the withdrawal pause will go on for as long as possible, citing the current market condition as one of the reasons.
Interestingly, BlockFi’s latest statement appears to be a deviation from the earlier assurance of its founder and COO Flori Marquez. Marquez had suggested that there was no reason to fret as BlockFi products remain fully operational. He said the platform has a $400 million line of credit from FTX US and claimed that that is a separate entity from the global one having a liquidity crisis.