The cryptocurrency neighborhood went through a string of unfortunate incidents throughout the week. The collapse of the FTX empire kept people in the cryptocurrency realm in disbelief. Several employees and outside investors reasoned to have lost their life savings while users’ money was still trapped on the platform.
The fall of FTX also affected the cryptocurrency lending platform, BlockFi. Amidst all the chaos, BlockFi halted the withdrawals on their platform. The New Jersey-based exchange informed the users on Nov 11 that it would be “limiting platform activity”. BlockFi recently stated in a letter shared on Twitter that it was “shocked and dismayed” by the failure of FTX and Alameda.
In one of the recent reports by the Wall Street Journal, BlockFi is preparing for potential bankruptcy after the collapse of Sam Bankman-Fried’s exchange.
Reports reveal that BlockFi had significant exposure to FTX
As per the details from people familiar with the matter, the cryptocurrency lender is preparing for a potential bankruptcy. Details reveal that it had significant exposure to Bankman-Fried’s FTX. The cryptocurrency lender is also planning to lay off some of its employees as it gets ready to file a possible Chapter 11.
It should be acknowledged that FTX purchased BlockFi in July of this year when the cryptocurrency lender was experiencing severe financial difficulties. The platform was exposed to the failure of Three Arrows Capital to the tune of $80 million. Despite the failure of FTX, the company initially declared itself to be “fully functional”.
However, the situation seems to be different now, as the lender has seemingly been greatly affected by the fall of FTX. It also joins the list of affected firms associated with the fall of the FTX empire.