BlockFi Discloses FTX Exposure, Alameda Loans As Withdrawals Still On Pause
The FTX implosion continues to unravel the web of mysteries that apparently shroud the crypto industry. Crypto lender BlockFi just disclosed that it has positions in the now bankrupt exchange and extended loans to its sister hedge fund Alameda Research.
In refuting rumors that “a majority of BlockFi assets are custodied at FTX,” the BlockFi team confirmed it has “significant exposure” to FTX and its associated entities.
“The rumors that a majority of BlockFi assets are custodied at FTX are false. That said, we do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US,” the lender said in its blog.
The firm also tried to assure investors that it will “continue to work on recovering all obligations owed to BlockFi.” However, it expects delays on the process as FTX undergoes its own bankruptcy proceedings.
“At this time, withdrawals from BlockFi continue to be paused. We also continue to ask clients not to submit any deposits to BlockFi Wallet or Interest Accounts,” the team added.
BlockFi recently announced that it would be ”limiting platform activity”–including pausing withdrawals–following the uncertainty posed by the situation with FTX; back then, the firm wasn’t yet upfront with the amount of exposure it has to the crypto exchange’s downfall.
This is a complete turnaround from the statements tweeted just two days before by BlockFi Founder and COO Flori Marquez, underlining then that ”all BlockFi products are fully operational.”
The crypto firm also promised that it “has the necessary liquidity to explore all options” about how to move forward. It continues to retain Haynes and Boone as primary outside counsel while BRG has been engaged as its financial advisor.
Back in June, FTX got close to acquiring BlockFi at a 99% discount—FTX was reportedly to pay just $25 million for BlockFi, which last summer held a valuation of $4.8 billion.
Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
