Cointime

Download App
iOS & Android

BlockFi:The Rumors That a Majority of BlockFi Assets Are Custodied at FTX Are False

Dear BlockFi Clients,

We know the past few days have been incredibly difficult for you. We are deeply saddened to see the devastation that is cascading across an industry that we love and believe in, touching the lives of so many people. Our top priority remains doing the best we can for our clients.

After everything we accomplished this summer to protect BlockFi, last week’s news regarding FTX was unexpected for us at BlockFi and for so many others. We are working around the clock to evaluate all of our available options.

Where do things stand today?

We determined late last week that in the current environment we could no longer operate our business as usual. Given that FTX and its affiliates are now in bankruptcy, the most prudent decision for us, in the interest of all clients, is to continue to pause many of our platform activities for now.

The rumors that a majority of BlockFi assets are custodied at FTX are false. That said, we do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US. While we will continue to work on recovering all obligations owed to BlockFi, we expect that the recovery of the obligations owed to us by FTX will be delayed as FTX works through the bankruptcy process.

At this time, withdrawals from BlockFi continue to be paused. We also continue to ask clients not to submit any deposits to BlockFi Wallet or Interest Accounts.

Regarding our credit card product, BlockFi relies on partners to deliver the credit card product. BlockFi handles any distribution of rewards. Customers may have received communication that didn't originate from BlockFi, but from our partners, Evolve Bank and Deserve. We are working with our partners and intend to directly provide further details on our credit card program as and when appropriate.

What’s next?

There are a number of scenarios that may be available to us, and we are doing the work now to determine the best path forward. BlockFi has the necessary liquidity to explore all options and we have engaged expert outside advisors that are helping us navigate BlockFi’s next steps. Haynes and Boone continues to serve as our primary outside counsel, and BRG has been engaged as our financial advisor.

As we work expeditiously through this quickly evolving situation, we are focused on doing the utmost to be transparent around decisions related to our pause, products, and platform activity.

Across BlockFi, our team is working tirelessly towards our primary objective of maximizing value for all of our clients, and that will see us explore every strategic option available to us.

We will do our best to communicate through our official channels as often and transparently as possible going forward but expect these explorations may take time. We appreciate your patience during this period.

FTX
Comments

All Comments

Recommended for you

  • Australian Tax Office to Collect Personal and Transaction Data of 1.2 Million Cryptocurrency Traders

    The Australian Taxation Office (ATO) is set to obtain personal and transaction details of up to 1.2 million cryptocurrency traders from exchanges. The move is part of the ATO's efforts to prevent tax evasion. The data collected will include names, addresses, birthdays and transaction details of traders to help the ATO audit compliance with obligations to pay capital gains tax on sales. The ATO aims to identify traders who have not reported their cryptocurrency-related activities, including the exchange of crypto assets when they sold it for currency or used it to pay for goods and services. The crackdown on the crypto industry in Australia has intensified since the collapse of FTX.

  • Binance Research: Total cryptocurrency market value fell 11.3% in April, and total supply of US dollar stablecoins reached a two-year high

    Binance Research released its April cryptocurrency market report, with the following key points:

  • Vitalik: Plasma can prevent double withdrawal of any asset in a self-consistent way

    Vitalik Buterin, co-founder of Ethereum, stated on X platform that the purpose of Plasma is not to prevent invalid/unavailable state transitions, but rather to allow users with valuable assets to exit using the previous (valid and available) state when such a situation occurs, in a way that prevents double exits of any assets with consistent rules.

  • Hong Kong Bitcoin spot ETF saw its first net redemption, with a net redemption of 75.36 Bitcoins yesterday

    According to SoSo Value data, the Hong Kong Bitcoin spot ETF saw its first net redemption since trading began on April 30th. On May 6th, there was a net redemption of 75.36 Bitcoins, with a total holding of 4150 Bitcoins, a daily turnover of 8.6 million US dollars, and a total net asset value of 266 million US dollars.

  • The total net asset value of the US Bitcoin spot ETF is US$52.234 billion

    According to SoSoValue data, The total net inflow of US Bitcoin spot ETFs was $217 million on May 6 (US Eastern Time) yesterday. The net inflow of Grayscale ETF GBTC was $3.937 million yesterday, and GBTC's historical net outflow is currently $17.458 billion. The Bitcoin spot ETF with the highest net inflow yesterday was Fidelity ETF FBTC, with a net inflow of $99.1936 million in a single day, and FBTC's total historical net inflow has reached $8.13 billion. The second is Ark Invest and 21Shares' ETF ARKB, with a net inflow of $75.6412 million in a single day, and ARKB's total historical net inflow has reached $2.237 billion.

  • Crypto Super PAC Raises Over $100 Million for 2024 US Election

    According to PUBLIC CITIZEN, a cryptocurrency industry-backed super PAC has raised over $102 million, ranking third among all super PACs participating in the 2024 election. More than half of the political funds for the cryptocurrency super PAC (about $54 million) come from direct corporate spending, mainly from Coinbase and Ripple Labs.It is reported that four of the eight corporate cryptocurrency super PAC donors have settled or face charges from the US Securities and Exchange Commission (SEC) for alleged violations of securities laws, with Ripple Labs alone facing a fine of nearly $2 billion.

  • The US government seized 3,940 BTC from drug dealers

    Blockchain data tracking company Arkham has stated that the US government has seized $250 million worth of BTC, currently being held by Arkham. The US government obtained 3,940 BTC from drug dealer Banmeet Singh and seized them during a trial in January 2024. According to court documents, Singh was responsible for selling controlled substances on the dark web market from 2012 to 2017 and distributing them throughout the United States. The statement from the Department of Justice (DOJ) and court documents match the on-chain flow of funds already added to our US government entity.

  • Jack Dorsey's Blockchain plans to raise $1.5 billion through senior notes issuance

    Jack Dorsey's financial technology company, Block (formerly known as Square), announced on May 6th that it plans to issue $1.5 billion in preferred notes to qualified institutional investors through private placement.

  • Yesterday, the US Bitcoin ETF had a net inflow of $218 million

    According to HODL15Capital data, yesterday (May 6th), the net inflow of US Bitcoin ETF was 218 million US dollars.

  • The US SEC has submitted sealed documents regarding the lawsuit against Ripple

    On May 7th, former US federal prosecutor James K. Filan disclosed the latest progress in the SEC's lawsuit against Ripple on X platform. The SEC has submitted sealed documents containing its response brief and supporting evidence for remedies. These documents have not been made public yet. The revised version that will be made public is expected to be submitted before Wednesday, May 8th. Other sealed documents will be submitted later.