“We intend to communicate as frequently as possible […] but anticipate that this will be less frequent than what our clients and other stakeholders are used to.”

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BlockFi limits platform activity, including a halt on client withdrawals

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

The company said in a Nov. 11 tweet that a “lack of clarity on the status of FTX.com, 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 developing situation, it said. 

The firm has also requested that clients do not deposit to BlockFi wallets or Interest Accounts at this point in time.


— BlockFi (@BlockFi) November 11, 2022

It comes only days after a Twitter thread in which BlockFi founder and chief operating officer Flori Marquez on Nov. 8 assured users that all BlockFi products were fully operational, as it had a $400 million line of credit from FTX US, which is a separate entity from the one affected by a liquidity crunch.

2) @BlockFi is an independent business entity. We have a $400MM line of credit from https://t.co/rFQz2hySwu (not https://t.co/oVC3gZQ6lb) and will remain an independent entity until at least July 2023.

— Flori Marquez (@FounderFlori) November 8, 2022

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

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

Related: FTX US resigns from the Crypto Council for Innovation

The crypto community has not taken well to the abrupt change in language coming out of BlockFi, who had just 12 hours earlier assured 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 in the lead-up to the FTX fallout.

Blockfi 11 hours ago: withdrawals “will remain fully operational”

Blockfi 20 minutes ago: pausing withdrawals, can’t do business anymore.

This is why trusting institutions is tough… Sam Bankman-Fried says “everything’s fine,” now going bankrupt. https://t.co/q8GRAhXFgA

— Meet Kevin (@realMeetKevin) November 11, 2022

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