Cryptocurrency lending company BlockFi has no customer funds stored on the cryptocurrency exchange FTX. This is how they respond to rumors and try to calm their users. At the same time, they say they are financially tied to FTX in other ways.
Last night, BlockFi sent an update to all users of the platform. The crypto firm denies claims that most of its assets are in FTX, calling it a false rumor.
Users can’t record anything
However, customers still cannot access their cryptocurrencies. Bitcoin, USDC and any other currencies you earn interest on will be paused indefinitely. According to BlockFi, this is because they have significant exposure to FTX. For example, the collection of FTX’s obligations to BlockFi has been delayed.
These liabilities consist of financial arrangements between BlockFi and Alameda, assets held on FTX.com and amounts not drawn from the credit facility with FTX US.
Unfortunately, FTX US, which was not originally expected, is also in bankruptcy proceedings from FTX.
Is there sufficient liquidity?
The update was desperately needed, the last time BlockFi announced anything was before the weekend. The team therefore promised to communicate with users through official channels and explore all strategic options.
The BlockFi team has confirmed that it has sufficient liquidity to explore all options and has engaged outside consultants such as Haynes and Boone to guide the company’s next steps.
Credit card uncertainty
In addition, BlockFi wrote that it is in contact with partners and plans to provide more information directly about its credit card program if needed. BlockFi started issuing credit card two years ago.
“As we work quickly through this rapidly evolving situation, we are focused on doing our best to be transparent about decisions regarding our pause, product and platform operations.”
Users say on social media that their BlockFi credit card has stopped working. However, we have not received any confirmation from BlockFi itself.
Visa blocks FTX credit card
BlockFi is not the only crypto company with its own credit card. Believe it or not, the FTX also had big ambitions. However, payment company Visa ended its partnership with FTX due to the bankruptcy of the cryptocurrency exchange.
“The situation with FTX is unfortunate and we are closely monitoring developments,” said a Visa spokesperson. “We have terminated our global agreements with FTX and their US payment card program will be discontinued by their issuer.”
In October, the cryptocurrency exchange announced that it will launch a Visa debit card in more than 40 countries, starting in South America. Cuy Sheffield, Head of Crypto at Visa:
“We are excited to partner with leading cryptocurrency exchanges such as FTX to bring greater flexibility and ease of use to the way people use their cryptocurrencies. This unlocks the ability to use cryptographic balances to fund purchases wherever Visa is accepted.”
Playing the year 2022 for BlockFi
Back to BlockFi. 2022 cannot end soon for the cryptocurrency company. Earlier this year, lending was hit by the Celsius and Voyager bankruptcies. Then, in July, the company received help from FTX in the form of a $250 million loan.
The industry has taken a huge hit, but confidence in cryptocurrency lenders may have fallen even further.
Source: Btc Direct
John Cameron is a journalist at The Nation View specializing in world news and current events, particularly in international politics and diplomacy. With expertise in international relations, he covers a range of topics including conflicts, politics and economic trends.
