BlockFi has ‘significant exposure’ to FTX, denies talk of majority of assets being custodied at FTX

BlockFi has responded to the controversies surrounding FTX and its reported connection to the embattled cryptocurrency exchange in a recent statement to its users.

The crypto firm denied allegations that most of its assets are on FTX and described the rumor as “false.” Though BlockFi admitted that it has a “significant exposure” to the exchange. which could cause a delay in the recovery of the obligations owed to BlockFi by FTX.

The exposure entails obligations owed to BlockFi by Alameda, assets held at FTX.com, and undrawn amounts from the credit line with FTX US.

FTX US, which originally wasn’t expected to be involved in any financial rescue, was also named in the recent FTX bankruptcy filing. 

What’s next?

Considering its next course of action, the BlockFi team pledged to communicate with users through official channels and explore every strategic option.

The BlockFi team confirmed that they have adequate liquidity to explore all options and have engaged outside advisors like Haynes and Boone to help them navigate the firm’s next steps. 

In addition, BlockFi confirmed that it is in contact with its partners and intends to directly provide further details on its credit card program when needed. Further, the team disclosed how it has been working effortlessly to protect BlockFi.

BlockFi said:

“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.”

Side notes about FTX and BlockFi

BlockFi recently said it could no longer proceed with its usual business last week amidst the FTX crisis.

pic.twitter.com/zNF1uP6evl

— BlockFi (@BlockFi) November 11, 2022

To some extent, 2022 has been filled with ups and downs for BlockFi. Early this year, the crypto lender plunged into crisis due to the Celsius and Voyager bankruptcy issue. Then, in July, the firm received a lifeline for FTX in the form of a $250 million credit facility.