Despite contradicting reports that the majority of its assets are on FTX, BlockFi acknowledged that it had substantial exposure to FTX.
In a recent letter to its subscribers, BlockFi addressed the problems surrounding FTX and its possible links to the troubled cryptocurrency exchange.
The cryptocurrency company refuted claims that the majority of its assets are on FTX, calling the report “fake.” Although BlockFi acknowledged that it had “substantial exposure” to the exchange, this might create a delay in FTX’s repayment of BlockFi’s obligations.
The exposure consists of Alameda’s liabilities to BlockFi, assets held at FTX.com, and undrawn credit line amounts with FTX US.
FTX US was included in the latest FTX bankruptcy case, despite initial expectations that it would not be engaged in any financial rescue.
The BlockFi team, contemplating its next line of action, promised to engage with subscribers via official channels and investigate all strategic options.
The BlockFi team has recruited external consultants such as Haynes & Boone to assist them to navigate the company’s next stages after confirming they have sufficient cash to investigate all possibilities.
In addition, BlockFi indicated that it is in communication with its partners and would give further information on its credit card program directly as required. Additionally, the team revealed how simple it has been to protect BlockFi.
BlockFi said: “As we move swiftly through this rapidly shifting scenario, we are committed to being as open as can with our pausing, services, and platform activity choices.” BlockFi said last week that it could no longer do business as normal due to the FTX problem.
BlockFi has seen both ups and downs during 2022. Due to the Celsius and Voyager bankruptcies, the crypto lender slid into difficulties at the beginning of this year. Then, in July, FTX got a $250 million credit facility that served as a lifeline.