BLOCKFI

DESCRIPTION OF EVENTS

"BlockFi is a crypto management platform that lets you leverage your cryptocurrency and put it to fair use." "This platform has been around since 2017, and while it’s independently owned, several financial giants like SoFi and Fidelity back it." "At BlockFi, you can earn up to 8.6% interest per year on your cryptocurrency holdings, borrow cash, buy and sell crypto, and access other bank-like services. It’s like an all-in-one crypto bank." "Today, a growing number of users are using BlockFi as a bank for their cryptocurrency. Just like you use Bank of America or a Credit Union for your fiat currency, you can use BlockFi for your cryptocurrency."

"BlockFi [recently] introduced trading at no fees for Bitcoin, Ethereum and the stablecoin GUSD. The startup has been known to allow users access to returns on their cryptocurrency holdings by offering loans to borrowers against users’ cryptocurrency holdings and then passing across the returns in terms of interest on the loans while securing the crypto assets that were used as security for the loans."

"BlockFi’s cracks are closely related to the lifeline it received in July, when FTX agreed to support the lender with a $400 million credit facility as rival lenders Celsius and Voyager were entering bankruptcy. "

"When BlockFi failed to find much-needed funding elsewhere, Bankman-Fried played the role of crypto rescuer. The fallen crypto mogul had said his firm sought responsible players with sustainable business models that could use short-term liquidity."

"BlockFi, the crypto lender bailed out by FTX earlier this year, has suspended withdrawals only two days after assuring users that it was fully operational."

"In a tweet late Thursday, BlockFi said it cannot operate suitably due to uncertainty surrounding FTX.com, FTX US and Alameda Research. Co-founder Flori Marquez had earlier tweeted the firm remained an independent entity despite its bailout deal with FTX — implying that it was mostly unaffected by the exchange’s implosion."

“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,” BlockFi tweeted.

"Given the lack of clarity on the status of FTX.com, FTX US and Alameda, we are not able to operate business as usual. Ourpriority has been and will continue to be to protect our clients and their interests.

Until there is further clarity, we are limiting platform activity, including pausing client withdrawals as allowed under our Terms. We will share more specifics as soon as possible. We request that clients not deposit to BlockFi Wallet or Interest Accounts at this time.

We intend to communicate as frequently as possible going forward but anticipate that this will be less frequent than what our clients and other stakeholders are used to."

"Bankrupt crypto lender BlockFi expects to grant customer withdrawals [2023] summer upon the successful completion of essential testing to verify accurate account balances."

The digital assets contained within the custodial omnibus wallets, as of the platform pause, do not belong to BlockFi, Judge Michael Kaplan said in the May court order.

“BlockFi needs to build new product functionality and make changes to the platform in order to process these withdrawals,” the lender said, according to screenshots of the email posted to Twitter.

Explore This Case Further On Our Wiki

BlockFi is a cryptocurrency management platform that offers services such as earning interest on cryptocurrency holdings, borrowing cash, and trading cryptocurrencies. It has been backed by financial giants like SoFi and Fidelity. Recently, the platform introduced fee-free trading for Bitcoin, Ethereum, and the stablecoin GUSD. However, BlockFi suspended withdrawals in November 2022 due to uncertainty related to FTX.com, FTX US, and Alameda Research. This move came just two days after assuring users that it was fully operational. The company expressed shock and dismay at the situation surrounding FTX and Alameda. They aim to protect their clients' interests and anticipate providing more information when available. A court order from May 2023 mentioned that digital assets in BlockFi's wallets don't belong to BlockFi, and the platform is working on building functionality to process withdrawals, aiming to grant withdrawals in the summer.

BlockFi Review: Does BlockFi Work? Is It Legit or Too Risky? | Observer (Jul 5)
BlockFi Offers Zero-Fee Trading for Bitcoin, Ethereum and GUSD Stablecoin (Jul 5)
BlockFi Rate Cut on Bitcoin Deposits Leaves Rivals Scratching Heads - CoinDesk (Jul 5)
BlockFi Review 2021: Fees, Services & More (Jul 5)
You Got Robbed | FTX and BlockFI Crash - YouTube (Dec 11)
BlockFi set to open customer withdrawals in summer - Blockworks (Oct 11)
@BlockFi Twitter (Oct 11)
BlockFi Stops Withdrawals, Hinting FTX Mess Can Only Get Worse - Blockworks (Oct 11)

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