- Salt Lending has announced that it is halting withdrawals on the back of the FTX collapse
- Blockfi is also thought to be considering bankruptcy
- The oil slick of crypto contagion shows no sign of dissipating
The FTX fallout continued yesterday when loan platform Salt announced that it was halting withdrawals and Blockfi was reportedly considering starting bankruptcy proceedings. Blockfi was already known to be struggling but Salt’s issues are unexpected, and illustrates how many other crypto platforms were either relying on credit from FTX or had money on the platform.
Salt Halts Withdrawals and Deposits
Salt sent an email to users yesterday in which CEO Shawn Owen warned that the collapse of FTX had impacted the company:
I am sorry to report that the collapse of FTX has impacted our business. Until we are able to determine the extent of this impact with specific details that we feel confident are factually accurate, we have paused deposits and withdrawals on the SALT platform effective immediately.
Salt loans will still be operational, Owen added, and said that the company is “working diligently with our partners to secure a clear path forward and plan to be as transparent as possible.” Deposits are discouraged although they will still be accepted on-chain for those who have an appetite for risk.
Blockfi Considering Bankruptcy?
Blockfi also could pay the ultimate price for being involved with FTX after the Wall Street Journal suggested yesterday that the lending platform was on the verge of announcing bankruptcy. The company posted an update on Monday in which it said that it was “not able to operate the business as usual” due to its exposure to FTX, and the Journal claimed that Blockfi is planning to lay off workers and is exploring a bankruptcy filing.
Blockfi is thought to have between $14 billion and $20 billion in customer deposits and had lent out $7.5 billion, according to the journal’s sources, although these deposits are now likely worth much less given the decline in cryptocurrency prices this year.