Blockfi stops payments and points out that FTX chaos can only get worse

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Blockfi has suspended payments, which indicates that the FTX drama can only get worse

Blockfi, the crypto loan, which was saved by FTX at the beginning of this year, exposed the payments less than two days after insured to the user that it was fully functional.

In a Twitter on Thursday, Blockfi said that due to the uncertainty about ftx.com, ftx US and alameda Research cannot operate appropriately. Co-founder Flori Marquez had The company remained an independent unit despite its rescue package-what means that it remained largely unaffected by the persistent crisis.

But the events quickly turned. The company in Hoboken, New Jersey, has now warned of deposits in blockfi wallets or interest accounts.

"We are shocked and dismayed about the news about FTX and Alameda. We, like the rest of the world, have learned about this situation on Twitter," tweeted Blockfi.

The cracks of Blockfi are closely related to the lifebuell, which it received in July when FTX agreed to support the lender with a loan facility of $ 400 million when competing lenders Celsius and Voyager went bankrupt.

The rescue operation, now seen as part of an FTX deals was linked to conditions: Bankman-Fried could take over the company next year for only $ 240 million if he wished.

It is not clear whether the battered lender actually received the FTX credit factility. Blockfi did not answer the request from Blockworks after a comment until the editorial deadline.

Blockworks recently spoke to corporate insiders, which described a number of problems with the lender in detail, including a mentality that focuses on expanding customer deposits that ultimately serve as liabilities.

Since these deposits were withdrawn after complaints from the SEC and the confidence in crypto loan, in view of the decline of Celsius and Voyager, had disappeared at the broader level, the income and balance sheets of Blockfi suffered. The company documents received showed that the monthly income of $ 48 million decreased to around $ 15 million in July and August at the beginning of the year.

When a blockfi found no urgently needed financing elsewhere, Bankman-Fried played the role of the crypto rescuer. The fallen crypto mogul had said that his company was looking for responsible actors with sustainable business models that could use short-term liquidity.

Jack Saracco, co -founder of the digital bank Ping, said that the networking of the industry means that the broader effects of the collapse of FTX still have to be worked out.

"In the entire industry there is so much commitment in FTX that we simply do not know in addition to the commitment that we know about," he said to block works, adding that Blockfis trust in an FTX rescue operation that will probably not take place is part of it.

Saracco noticed that the broader crypto acceptance was now being thrown back, and was frustrated that "we do not know who belongs in this insolvency chaos".

Blockfi is not the only company that is to be saved by FTX

Sequoia, Multicoin Capital, Temasek and Paradigm are among the risk capital companies that could lose millions through their investment in FTX. Other investors should prepare for further turbulence.

But also Voyager, another crypto loan, relied on FTX to keep his face. In September, FTX.us won an auction to buy the bankruptcy of the Bankrotten crypto loan voyager for $ 1.4 billion. This deal should make Voyager's customers healthy, but the unsecured creditor committee of the bankrupt company on Thursday come.

Alameda Research, the trading company founded by Bankman-Fried, agreed to borrow $ 500 million in June. At that time, many in the industry saw the series of rescue packages as a positive step.

Fast lead until November and FTX faces a deficit of $ 8 billion, a number that apparently contains swaths of user money. FTX is now critical and will probably not help others, especially when you consider that it cannot save yourself. The Bahamas' security supervisory authority frozen the assets of Bahama-Fried's assets on Thursday and requested that the company be appointed an insolvency administrator for the company.

an message from the American subsidiary of FTX, which Bankman-Fried had claims that would not have been affected by the confusion, now says that trading on the platform could be stopped in a few days. "Please close all the positions you want to close. Payouts are and remain open," says an explanation.

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The contribution Blockfi Stops with -drawals, Hinting ftx chaos can only get worse is not a financial advice.