On November. 14, in an official update sent to customers, BlockFi admitted to bearing significant exposure to FTX and its related companies but insisted it had the necessary liquidity to explore all options.
The report came as somewhat of a shock as on Nov. 8, BlockFi’s founder and chief operating officer, Flori Marquez, ensured users in a Twitter thread that all BlockFi products were fully operational because it had a $400 million line of credit from FTX US, which is a different entity from FTX, the global entity influenced by the liquidity crunch.
In the forthcoming weeks, it may come as no shock to learn that many more enterprises have been affected by FTX’s failure. On Nov 15, Crypto lending platform SALT also unveiled that it would halt withdrawals and deposits to its platform effective immediately because the collapse of FTX has impacted their business, according to an email mailed to its clients.
In an email captured in a tweet spreading online, the company shared that until they are able to specify the extent of this effect with distinctive details that they feel confident are factually accurate, they have paused deposits and withdrawals on the Salt platform presently.
Shawn Owen, the CEO of SALT, rejected allegations that this is a signal his company was going bust. However, he did mention that they did not publish this as a notice of going bust. They are pausing to deal with the fallout of FTX and to verify that none of their counterparties have any further risks so that they can proceed with maximum caution with all actions directed at not going bust.
The Japanese cryptocurrency exchange Liquid suspended withdrawals amid the ongoing problem amid centralized crypto exchanges. The FTX-owned crypto exchange Liquid took to Twitter to officially announce a suspension of fiat and crypto withdrawals on its Liquid Global platform.
Only a day after rejecting that the majority of its assets were harbored on FTX before the exchange’s failure, BlockFi is allegedly readying to file for bankruptcy, according to a source aware of the matter, as conveyed by the WSJ.
Further, Circle, the company behind the distribution of USDC Coin (USDC), stated that the recent events have spurred it to miscalculate its financial projections referring to the collapse of FTX and a decision by crypto exchange Binance. However, the CEO of the company revealed on Twitter that they did not make loans to FTX or Alameda. Here is the thread:
Just a single exchange’s collapse has had a severe effect on other firms and in general on the crypto community. It is definitely a wake-up call for the whales at least for the short term considering the market crisis, political situation, and then, of course, the BTC price getting lower.
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