Final Block

Market Meditations | November 16, 2022

Is BlockFi approaching its final block? After a series of statements since FTX collapsed they appear to be less certain about what the future holds. And rumours are now swirling about bankruptcy.

  • BlockFi is a U.S.-based crypto wallet and exchange that also offers lending and credit card services.
  • Because they offer interest to customers depositing cryptocurrency, they have been in the crosshairs of regulation for some time. In July last year, the New Jersey Bureau of Securities ordered them to “stop offering interest-bearing accounts“.
  • But last week’s events have set a number of wheels in motion. Founder and COO Flori Marquez tweeted a thread on November 8th trying to assure users that everything was “fully operational“.
  • However, three days later BlockFi tweeted to say that they were “not able to operate business as usual” and that they were “pausing client withdrawals“.
  • An official statement followed on their website on November 14th stating that although most assets were not stored on the exchange, they “do have significant exposure to FTX and associated corporate entities“. This exposure included Alameda debt and a credit line with FTX.US.
  • Multiple outlets have since reported rumours that BlockFi was preparing for possible bankruptcy. Decrypt said that they were looking at layoffs and talking with Binance.

In these trying times, it appears that only one man is operating as normal.