BlockFi, the crypto lender bailed out by FTX earlier this year, has suspended withdrawals only two days after assuring users that it was fully operational.
In a tweet late Thursday, BlockFi said it cannot operate suitably due to uncertainty surrounding FTX.com, FTX US and Alameda Research. Co-founder Flori Marquez had earlier tweeted the firm remained an independent entity despite its bailout deal with FTX — implying that it was mostly unaffected by the exchange’s implosion.
But events quickly turned. The Hoboken, New Jersey-based firm has now warned against depositing into BlockFi wallets or interest accounts, which are still advertised to offer up to 10% annual percentage yield on deposits.
“We are shocked and dismayed by the news regarding FTX and Alameda. We, like the rest of the world, found out about this situation through Twitter,” BlockFi tweeted.
BlockFi’s cracks are closely related to the lifeline it received in July, when FTX agreed to support the lender with a $400 million credit facility as rival lenders Celsius and Voyager were entering bankruptcy.
The bailout, now seen as part of a string of bad FTX deals, came with strings attached: Bankman-Fried could acquire the firm for as little as $240 million next year, if it so desired.