Cryptocurrency News, Cryptocurrency Regulation, Finance News

Crypto Fintech Platform, Blockfi, Gets Hit by FTX Collapse

After formerly denying any involvement with collapsing crypto exchange, FTX, crypto lending and fintech service platform, BlockFi, will now be the latest company to feel the brunt of FTX’s collapse consequences in the crypto industry after reports from Forkast News stated that BlockFi announced that the collapse has affected them due to their significant exposure to the crypto exchange.

BlockFi also confirmed that it owes FTX some credit obligations due to the financial assistance the crypto exchange gave as well as the $400 million revolving credit facility it offered when BlockFi lost $80 million due to the liquidation of Three Lions a few months ago. 

BlockFi Joins the List of Firms Affected by the Collapse of FTX

Last week, BlockFi halted user transactions citing the inexplicable financial circumstances surrounding FTX and Alameda Research as the reasons for its decision. The situation escalated when The Wall Street Journal reported that BlockFi was planning to offset some of its employees in a bid to file for Chapter 11 Bankruptcy like FTX.

That report summed up the financial situation of BlockFi to their involvement with FTX. And although BlockFi might be one of the most affected, it isn’t the only firm that has suffered from exposure to FTX. 

Who Else Has Been Affected by Exposure to FTX?

Companies like Sequoia Capital and Paradigm with stakes in the crypto exchange are already set to lose. Even Japan’s SoftBank has revealed that FTX’s collapse will now mean that they would lose their $100 million investment fundraising in the crypto exchange.

The Solana blockchain and its native coin, $SOL have also had their share of woes as they lost 60% of their market value following FTX’s collapse. There are also reports that developers and investors are gradually backing out of Solana in anticipation of more consequences to the blockchain and token.

Also, Nigeria’s Nestcoin has not been left out. The CEO of the startup, Yele Bademosi, revealed that the company stored its assets (fiat and digital) in FTX to enable it to operate efficiently. But with the collapse of FTX, those reserves could be going down the drain. As a result, Nestcoin will be releasing a number of its employees as well as devising a new way to go about the whole process of managing its losses.

So although FTX is down, it is going down alone because of the number of investors and creditors who held their assets and liabilities in the company.

Leave a Reply

Your email address will not be published. Required fields are marked *