'Gutted right now,' one customer of the once-$3 billion valuation lending firm said.
Once valued at $3 billion, BlockFi shocked its users last week when it paused withdrawals.
The Nov. 10 announcement came one day after BlockFi said all of its products were functioning normally and employees across the firm were mollifying client concerns about contagion. "BlockFi is an independent business entity so the FTX news does not impact us internally," an employee told a client in an email on Nov. 8.
"The fastest way to cure margin is to post additional collateral to your loan," BlockFi said in an email sent to one client."To do this, deposit crypto into your BlockFi Wallet and post collateral to your loan via your BlockFi dashboard." BlockFi's trajectory took a downturn this past summer amid a wider credit crunch that swept crypto's nascent and immature capital markets. While BlockFi did not then declare bankruptcy or pause withdrawals like rivals Celsius or Voyager, it did ultimately enter into a deal with FTX that gave the now-bankrupt crypto exchange run by Sam Bankman-Fried the option to acquire BlockFi. In turn, BlockFi signed a term sheet to secure $250 million through a revolving credit facility.
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