Layoffs, & paused withdrawal: Is BlockFi bankrupt?
The crypto lending firm, BlockFi, certainly finds itself in hot waters after the FTX collapse. Recently, it suspended withdrawals from client wallets and interest accounts. It is also facing a severe liquidity crisis as the FTX exchange crashed. There are reports suggesting that the firm plans to lay off its workforce. So, is BlockFi bankrupt?
Is BlockFi bankrupt?
Earlier, the firm denied having a line of credit of around $400 million from FTX. However, later it accepted its affiliation with the crashed exchange. The Sam Bankman-Fried owned exchange provided this fund to BlockFi to bail it out in July. As the business has collapsed, it has again created financial problems for the crypto lender.
Rumours suggest that the crypto lender is pondering filing for insolvency amid this situation. Other than that, it may even sack some of its employees to cut down its expenses.
Moreover, it has already restricted activities on the platform, suspending withdrawals for its clients. These moves indicate that the firm might have to move towards complete closure.
Impact of FTX crash on other crypto firms
FTX collapse has rattled the entire crypto market. BlockFi is not the only platform that is facing issues after the decline of Sam Bankman-Fried’s exchange. Another digital asset lending platform, SALT, has also paused deposits and withdrawals. It has notified its users that “in light of recent industry events”, the firm has taken this step.
Furthermore, SALT has admitted that the fall of SBF companies has also affected its business. Therefore, it is taking this step as a precautionary measure. However, the platform’s CEO, Shawn Owen, has clarified that it is not going bust. This is a temporary measure. It is to examine how much the events have affected the platform. Nonetheless, it will be effective immediately to limit potential risks.
Author: Wasay Ali
Wasay Ali is a versatile professional writer with global experience and a background in mechanical engineering and social science. He is adept at crafting news and informational content for the crypto space and has experience writing for other niches. He is a professional SEO content writer who has worked with several digital marketing agencies and clients in the US, UK, Pakistan, and Europe. He is a dedicated volunteer and enjoys reading, writing, poetry, and going to the gym. He is an INFJ-A personality type dedicated to positively impacting the world. Wasay has a passion for writing as it allows him to express his creativity, share his knowledge, and connect with people worldwide.