The fall of FTX and Alameda has caused a cascade effect, affecting other industry participants such as BlockFi, SALT or Liquid.
BlockFi, a cryptocurrency financial services company, has released an official update admitting to having a “significant exposure” to FTX and its affiliated companies. However, the company insists that it has the necessary liquidity to cover its operations.
This update has surprised many, as Flori Marquez, founder and COO of BlockFi, assured that the majority of the company's assets were not linked to FTX and that all of its products were fully operational.
After the update, The Wall Street Journal published information that indicated that BlockFi could be preparing to declare bankruptcyAccording to this information, the company would be considering the dismissal of several employees, as they prepare to file for Chapter 11 of the United States Bankruptcy Code.
Chapter 11 is the bankruptcy petition, something you already signed Celsius Network in its day and that FTX did it too last Friday, November 11.
The “significant exposure” to FTX that BlockFi refers to would be a $400 million credit line at FTX US, as well as obligations to Alameda Research and assets held at FTX.com.
BlockFi has hired external advisors to deal with this situation and they have assured that they are working “day and night” to evaluate all possible optionsThe company says it is trying to be as transparent as possible about the reasons for the pause, the products and the platform's activities.
The cascading effect of the FTX bankruptcy doesn't just affect BlockFi
The consequences of FTX crash will be seen in the coming weeks, with more companies affected by this crisis.
Beyond BlockFi, on November 15, the cryptocurrency lending platform SALT announced that it was temporarily halting withdrawals and deposits, to fully assess the impact that the FTX crash had had on the business.
SALT has explained that it is suspending withdrawals and deposits for the time necessary to be able to analyze the scope of the impact and to obtain details of how the FTX crisis has affected them.
Shawn Owens, CEO of SALT, explained on Twitter that the company is not bankruptThe decision was made to pause the activity in order to thoroughly analyse the consequences of the current situation and confirm that they are not exposed to additional risks, thus avoiding bankruptcy.
Moreover, the Japanese exchange Liquid, owned by FTX, officially announced the suspension of withdrawals from its platform.
[hubspot type=cta portal=20298209 id=38fb28e1-1dc1-40e3-9098-5704ca7fcb07]
