The cascading effect of FTX’s fall is now being felt across the crypto space. In the latest, crypto lender BlockFi has paused withdrawals.
“Given the lack of clarity on the status of FTX.com, FTX US, and Alameda, we are not able to operate business as usual… Until there is further clarity, we are limiting platform activity, including pausing client withdrawals as allowed under our Terms,” BlockFi said in a statement.
In July, FTX US and BlockFi announced a deal under which FTX US extended a $400 million credit to BlockFi for a right to acquire it. The deal that allowed FTX to acquire the lending platform for $240 million had certain conditions to fulfill. These included obtaining SEC’s approval for a yield-generating service in the US and reaching at least $10 billion in client assets.
“We are shocked and dismayed by the news regarding FTX and Alameda. We, like the rest of the world, found out about this situation through Twitter,” the statement read.
The shockwave caused by the collapse of FTX and Binance backing out from an anticipated high-profile bailout, the crypto market cap has lost over 200 billion in the past few days.
The crash of one of the most popular crypto platforms came following the media reports based on leaked financials of Alameda Research, a trading platform with close business links with FTX. These reports said Alameda Research had over $5 billion of exposure to FTX’s exchange coin FTT, while the market cap of FTX was only a little over $3 billion.
