The cryptocurrency lender BlockFi has disclosed that it has significant exposure to FTX.
The demise of the FTX Empire shocked many in the crypto community. The collapse of FTX also had an impact on many users and projects. And the crypto lending platform BlockFi is one of them.
BlockFi suspended withdrawals in the midst of the chaos. On November 11, users were notified that the New Jersey-based exchange would be restricting platform activities.
In a letter circulated on Twitter, BlockFi expressed shock and dismay at the collapse of FTX and Alameda.
According to the WSJ, BlockFi is preparing for bankruptcy following the failure of Sam Bankman-Fried’s exchange.
According to one of its reports, information from sources indicates that the crypto lender is preparing for a possible bankruptcy.
The cryptocurrency lender has revealed that it is heavily invested in Bankman-Fried’s FTX. It even intends to lay off some of its employees in preparation for a possible Chapter 11 bankruptcy filing.
It is important to remember that FTX purchased BlockFi in July, when the crypto lending platform was experiencing serious financial difficulties.
The platform incurred a total of $80 million in risk as a result of Three Arrows Capital’s failure. Despite the fact that FTX had already failed, the corporation initially stated that it was “fully functional.”
However, things appear to be different today, as FTX’s demise appears to have had a significant impact on the lender.
It is now included among the other companies that have suffered significantly as a result of the FTX downfall. Furthermore, the FTX exchange declared Chapter 11 bankruptcy last week.