Shalini Nagarajan

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 <a href="https://twitter.com/BlockFi/status/1590875997351866368" target="_blank" rel="noreferrer noopener">tweet</a> 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 <a href="https://mobile.twitter.com/FounderFlori/status/1590030310787657729" target="_blank" rel="noreferrer noopener">tweeted</a> the firm remained an independent entity despite its bailout deal with FTX — implying that it was mostly unaffected by the exchange&#8217;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.



&#8220;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,&#8221; 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.&nbsp;



The bailout, now seen as part of a <a href="https://www.reuters.com/technology/exclusive-behind-ftxs-fall-battling-billionaires-failed-bid-save-crypto-2022-11-10/">string of bad FTX deals</a>, came with strings attached: Bankman-Fried could acquire the firm for as little as $240 million next year, if it so desired.



It isn’t clear whether the struggling lender actually received the FTX credit facility. BlockFi didn’t return Blockworks’ request for comment by press time.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://t.co/zNF1uP6evl">pic.twitter.com/zNF1uP6evl</a>&mdash; BlockFi (@BlockFi) <a href="https://twitter.com/BlockFi/status/1590875997351866368?ref_src=twsrc%5Etfw">November 11, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Blockworks <a href="https://cms.blockworks.co/news/how-blockfi-went-from-tech-unicorn-to-crypto-burnout/" target="_blank" rel="noreferrer noopener">recently spoke to company insiders</a> who detailed a slew of problems at the lender, including a mentality focused on expanding customer deposits that ultimately double as liabilities.&nbsp;



As those deposits were withdrawn following SEC lawsuits and diminished trust in light of Celsius and Voyager’s demise, BlockFi revenues and balance sheets suffered. Company documents obtained showed monthly revenue fell 70% from $48 million at the start of the year to roughly $15 million by July and August.



When BlockFi failed to find much-needed funding elsewhere, Bankman-Fried played the role of crypto rescuer. The fallen crypto mogul had said his firm sought responsible players with sustainable business models that could use short-term liquidity.&nbsp;



Jack Saracco, co-founder of digital bank Ping, said the interconnectedness of the industry means the broader effects of FTX’s collapse are yet to be worked out.



“There’s so much exposure across the industry to FTX that we just don’t know about, in addition to the exposure that we do know about,” he told Blockworks, adding that BlockFi’s reliance on an FTX bailout that likely won’t happen is part of it.



Saracco noted that broader crypto adoption that has now been set back and expressed frustration that &#8220;we don’t know who owns what in this insolvency mess.”



<h3 class="wp-block-heading">BlockFi not the only company meant to be saved by FTX</h3>



<a href="https://cms.blockworks.co/news/crypto-vcs-sequoia-multicoin-reckon-with-failing-ftx-investments/" target="_blank" rel="noreferrer noopener">Sequoia, Multicoin Capital,</a> Temasek and Paradigm are among venture capital firms that stand to lose millions from their investment in FTX. Other investors should brace for more turbulence ahead.



But Voyager, another crypto lender, was also relying on FTX to save face. In September, FTX.US won an auction to buy assets of bankrupt crypto lender Voyager for $1.4 billion. That deal was set to make Voyager’s customers whole, but the bankrupt firm&#8217;s unsecured creditors committee on Thursday <a href="https://twitter.com/VoyagerUCC/status/1590775946105135104" target="_blank" rel="noreferrer noopener">confirmed</a> the transaction never went through.



Alameda Research, the trading firm founded by Bankman-Fried, in June pledged to lend $500 million to Voyager. At the time, many in the industry saw the string of bailouts as a positive move.



Fast forward to November and FTX is facing a shortfall worth $8 billion, a figure which apparently includes swathes of user funds. FTX is now critically stuck and is unlikely to help others, especially considering it can’t save itself. The Bahamas Securities regulator on Thursday <a href="https://cms.blockworks.co/news/bahamas-regulator-freezes-ftx-assets/" target="_blank" rel="noreferrer noopener">froze the assets</a> of Bankman-Fried’s Bahamian subsidiary and moved to appoint a liquidator for the entity.



A <a href="https://ftx.us/home" target="_blank" rel="noreferrer noopener">message</a> by FTX’s American affiliate, which Bankman-Fried had <a href="https://twitter.com/SBF_FTX/status/1590709195892195329" target="_blank" rel="noreferrer noopener">claimed</a> would be unaffected by the mess, now says trading may be halted on the platform in a few days. “Please close down any positions you want to close down. Withdrawals are and will remain open,” it said in a statement.



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BlockFi Stops Withdrawals, Hinting FTX Mess Can Only Get Worse

Jacquelyn Melinek

<div id="highlights-block_621f6168d370a" class="highlights">
 <ul>
 <li>About 1 in 4 women already own crypto, the survey found</li>
 <li>Other subsectors in the industry remain largely untapped by women as only 5% have bought an NFT or participated in crypto mining</li>
 </ul>
 
</div>



About one-third of women are planning on buying cryptocurrencies this year, according to a new survey conducted by BlockFi. Of those women, 60% said they plan on buying digital assets within the next few months.



That’s more than double the 29% of women who said, in a September 2021 survey, they would purchase within the next year. 



“There’s no better way to learn about something new than by doing — especially when diving into the seemingly complex world of crypto,” Flori Marquez, founder and senior vice president of operations of BlockFi, said in a statement. 



About one in four women already own cryptoassets, and of that group, a majority of them have never sold what they’ve bought.



The findings also showed women are buying bitcoin, dogecoin and ether the most — at 71%, 42% and 18%, respectively. However, other subsectors in this space remain largely untapped by women, as only 5% have bought a non-fungible token (NFT) or participated in crypto mining.



In general, the crypto sector is a heavily male-dominated industry. Out of the 121 leading crypto companies, only five of them, or 4.13%, had female founders, according to <a href="https://cryptohead.com/cryptocurrency-company-index/?msID=5717aa95-8a58-4454-9210-9f72fa4cd4a0" target="_blank" rel="noreferrer noopener">research</a> by Crypto Head. Of those founders — Marquez being one of them — all the companies also have at least one male founder, too.



<figure class="wp-block-image"><img decoding="async" src="https://lh4.googleusercontent.com/Nu87tROsif4_LwFU8AQdFN_KSrq-YCJdhr-PlI68I_p1_pqovr6rQH9Qm2KIBukFKrNqmxkXoGC_nKT82IWu6ngxoSDvpQjY07_XSKtQvrjtzI_TaWshx_s7MLyDCa3Atp5FdraY" alt=""/><figcaption>Source: Crypto Head</figcaption></figure>



The number of women in the industry is set to grow, though. The BlockFi survey found that 15% of women are interested in working in crypto, but only 10% plan on applying to crypto or blockchain-focused companies within the next year.&nbsp;



“It’s very exciting to know that women are becoming more aware of the benefits of owning crypto and expressing interest in working in the crypto sector,” Marquez said. “Now it’s our responsibility to continue to close the education gap and provide as many on-ramps as possible, so women can easily gain exposure to crypto markets and get comfortable doing more with their crypto.”&nbsp;



The survey was conducted by a third-party survey panel at the end of January and consisted of 1,031 female Americans between the ages of 18 and 65. This is the third edition of its “Real Talk” survey, which is focused on female Americans’ attitudes toward crypto, financial wellness and career aspirations.&nbsp;



&#8220;Crypto is becoming a part of everyday financial wellness, and we must continue to educate new adopters and make financial products that are simple and easy to use,&#8221; Marquez told Blockworks. &#8220;Mass adoption presents a significant opportunity to drive inclusion in the industry.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.