Cryptocurrency lending startup BlockFi, cryptocurrency exchange announced that it had frozen all transactions after FTX filed for bankruptcy protection last week.
The company announced in a new blog post it shared today that the current situation still continues and the decision to stop the operations on the platform will continue for a while.
BlockFi executives denied claims that company assets were found in wallets on the FTX exchange. However, the startup’s sinking crypto exchange FTX and its subsidiary Alamenda Research, it is known to have given a large amount of credit. In a blog post, the firm explained the situation as follows:
“We have previously provided large loans to companies Alamenda Research, FTX and FTX.US. We bear a great risk because we may not be able to repay the debt we have given. BlockFi continues to work to allocate its loans back.”
BlockFi finances the crypto-based loan deposits it gives to large organizations through its users. Users earn deposit returns on the crypto money they deposit on the platform. The company transfers these deposits as loans to crypto startups.
“There Are Several Scenarios”
BlockFi executives stated that they covered all kinds of scenarios in their blog post. The company announced that it has the necessary liquidity and is working with external advisors for support.
Authorities asked users not to deposit cryptocurrencies in their BlockFi wallets and interest accounts during this process.
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