BlockFi is Collateral Damage

BlockFi announced an hour ago on Twitter that they’re also pausing customer withdrawals. Here’s their full statement:

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. Given the lack of clarity on the status of FTX.com, FTX US and Alameda, we are not able to operate business as usual. Our priority has been and will continue to be to protect our clients and their interests. Until there is further clarity, we are limiting platform activity, including pausing client withdrawals as allowed under our Terms. We will share more specifics as soon as possible. We request that clients not deposit to BlockFi Wallet or Interest Accounts at this time. We intend to communicate as frequently as possible going forward but anticipate that this will be less frequent than what our clients and other stakeholders are used to.

This is the definition of a bankrun. Their interest and priority is not customer accounts. They don’t have the money on hand to cover the volume of users trying to withdraw. If you’re caught up in the shit show, deepest apologies. I personally was fortunate enough to get what little I had in their interest account transferred out before they paused. But I know not everyone will fair as well.

It’s rough out there. If you’re hanging tough through all of this, congratulations. Nobody makes it through any level of market volatility without getting burned once or twice. But this year has been particularly heated.