BlockFi Latest Crypto Platform to Halt Withdrawals
BlockFi logo

BlockFi Latest Crypto Platform to Halt Withdrawals

With cryptocurrency exchange FTX filing for bankruptcy (after an acquisition deal with rival Binance fell through), the company’s fall is impacting other crypto FinTechs as well. That now includes BlockFi.

Last night, BlockFi announced that it was pausing withdrawals for customers and also requested that users not deposit funds at this time. In a statement posted to their Twitter account, BlockFi noted that the move was necessary due to news surrounding FTX and Alameda — with the company stating they found out about the situation via Twitter. The statement went on to say, “Given the lack of clarity on the status of, FTX US, and Alameda, we are not able to operate business as usual,” adding, “Our priority has been and will continue to be to protect our clients and their interests.”

As the Wall Street Journal reports, BlockFi struck a deal with FTX for a $400 million credit facility. That arrangement also included an option for FTX to purchase the company.

In February of this year, the firm agreed to pay a $100 million fine to settle a lawsuit with the Securities and Exchange Commission (SEC) that charged them with failing to register its crypto lending product, as well as violating registration provisions as outlined in the Investment Company Act of 1940. As a result of that settlement, United States customers were no longer able to open or add funds to a BlockFi Interest Account, although existing users were able to retain their account and balance.

Another somewhat complicating factor is BlockFi’s rewards credit card. Launched last year, that card offers 1.5% back in crypto when customers make purchases. Notably, the BlockFi Rewards Visa cards are issued by Evolve Bank & Trust rather than BlockFi themselves. As a result, a cardholder who may not feel inclined to pay off their balances while unable to withdraw funds from their crypto accounts should keep in mind that failure to make on-time payments could impact their credit scores.

Although the term “crypto winter” had already been commonly used to describe the current state of the sector, the rapid decline of FTX has taken the situation to a new level. Unfortunately, it seems that this will potentially lead to lost funds for not only FTX customers but also those with accounts at BlockFi and other firms. It will also be interesting to see how partners Visa and Evolve deal with the fallout from BlockFi Rewards credit card customers. With this quickly-developing story still unfolding, it likely won’t be too long before the dust settles and the damages are assessed.

Leave a Reply

The "Email" field is empty, you must enter some text to proceed.The text you entered in the "Email" field appears to be invalid, please edit it and try again
Get the Latest News Delivered to Your Inbox

A Guide to Building Credit and Increasing Your Credit Scores

When it comes to credit, there’s some good news. The average credit score in the United States has been steadily rising in recent years, coming in at 715 in 2023. That may be because, today, consumers not only have more ways to access their credit reports and scores than ever before but also because there are an increasing number of options that Americans have for building credit in the first...

2024 SoFi Checking and Savings Review

Ever since I started taking an interest in the FinTech sector, one company whose name I’ve seen pop up over and over again is SoFi. Lately it seems as though that theme has been sent into overdrive as the company has not only become a household name thanks to its stadium naming rights deal but also because of the company’s continued product expansions. The most interesting development in my mind...
Brim logo

Brim Financial Raises $85 Million as It Eyes Global Expansion

Toronto-based FinTech infrastructure startup Brim Financial has announced a new funding round. About the round: Brim has revealed an $85 million round. The Series C was led by EDC Investments while new investor Vistara Growth and returning investors White Owl Group, Epic Ventures, and Zions Bank also participated. To date, the company has now raised $110 million including a Series B in 2021. According to Brim, the latest funding will...
Chase Freedom Flex card

Chase Reveals Q2 2024 Freedom 5%(+) Bonus Categories

Chase has announced its bonus category picks for the second quarter of 2024 — including some interesting twists. About the categories: As April approaches, Chase has revealed what categories Freedom and Freedom Flex cardholders can earn bonuses on. From April 1st through June 30th, customers can earn 5% (or more) in three categories:, Hotels, and Restaurants. Similar to how Chase embraced a "New Year, New Me" theme last quarter,...
Rent Day

Bilt Announces Home Collection Deal for May 2024 Rent Day

For May's Rent Day, Bilt is offering a deal that will allow members to decrease their rent bill while also adding to their home decor. About the Home Collection offer: Bilt has crafted a unique Rent Day offer for May 2024. Through the 1st, when Bilt members redeem their points toward rent payments, they'll receive the same number of points to be used toward Bilt Home Collection items. To take...