BlockFi Suspends Withdrawals in Response to FTX

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Last Updated on November 11, 2022 by Bitfinsider

“Like the rest of the world, we learned about this scenario via Twitter,” BlockFi stated in a letter posted to the social media site Thursday night. The news involving FTX and Alameda has left us astonished and disheartened.

Given the lack of clarification over the status of FTX, FTX US, and Alameda, BlockFi states, “we cannot do business as usual.” Consequently, platform activity, such as withdrawals, will be restricted. Additionally, the company discouraged client deposits to hosted wallets and interest accounts.

While BlockFi committed to communicate as regularly as possible, it noted that its clients and stakeholders are accustomed to more frequent communication.

After Texas, New Jersey, and the SEC, California’s financial protection agency opened an investigation into FTX just hours prior to BlockFi’s announcement.

The Department of Financial Protection and Innovation advised customers to be aware of the risks associated with investing in volatile crypto assets. “Consumers and investors must be aware that crypto assets are high-risk investments and should not expect any losses to be refunded.”

The regulator warned investors that several providers of crypto assets, including FTX, may not have fully explained the dangers users face when depositing money on these platforms.

“Crypto asset providers are not subject to the same regulations and safeguards as banks and credit unions, which are required to have deposit insurance,” the agency stated, adding that it takes its supervisory responsibilities very seriously.

They stated, “We require anyone offering securities, loans, or other financial services in California to adhere to our financial regulations.”

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