Crypto

The FTX Contagion is Spreading! BlockFi Suspends Withdrawals; Is the Company Going Bankrupt?

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The market conditions presently have become worse as the domino impact of the recent FTX breakdown is being witnessed. After Terra (LUNA), Celsius Network, Three Arrow Capital, Voyager Digital, and FTX-Alameda, it’s time for BlockFi to join the list. According to an official update, BlockFi has suspended user withdrawals, citing its inability to carry out business as usual.

Some speculate that all the funds of the platform were on FTX, and moreover, according to some reports, BlockFi is left with only $18.37 million left in 6 wallets on Ethereum. These include 10,598 ETH worth $13.3 million, 3 million USDC, 2.9 million BAT worth $762,567, 478,180 USDT, and 48,598 UNI worth $270,207.

BlockFi’s tweet came just a couple of days after the company’s founder and Chief Operating Officer, Flori Marquez, said that “all BlockFi products are operational.” The COO also claimed to have a $400 million line of credit from FTX.US (not FTX) and will remain an independent entity until at least July 2023. 

Surprisingly, Sam Bankman Fried (SBF), CEO of FTX and Alameda, revived the BlockFi’e depositors, four months ago, as the platform was severely impacted by Terra’s collapse. Now, the depositors appear to be falling into the same situation again. 

More Trouble In-Coming for BlockFi

Meanwhile, Adam Cochran, a well-known analyst, speculates the contagion amount is pretty much bigger than displayed!

As per the analyst, the funds they owned were invested in various platforms, maybe stocks or real estate by recycling the funds. Hence this may have created dominoes to fall as they owed out far more from the capital they had. However, the analyst did not mention the thread is in reference to BlockFi or FTX, but the context points toward them. 

Moreover, many believe this to be the start, and the BlockFi collapse led by the FTX may create a ripple wave of fallout in the coming days. 

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