2 More Crypto Platforms Halt Withdrawals Over FTX Exposure

Crypto exchange Liquid Global announced on November 15th that it had halted both crypto and fiat withdrawals.

The same day saw Salt, a crypto lending platform, inform its customers that it was also pausing deposits and withdrawals.

In addition, reports indicate that another crypto lender, BlockFi, is gearing up to file for Chapter 11 bankruptcy protection.

The lending platform had paused its withdrawals five days ago and its announcement on Monday said that they would continue to be halted.

Withdrawal operations paused

Things are not looking good for people in the crypto space, as crypto companies are halting withdrawals, which means that people will have their funds stuck.

Two more firms joined the mix with both Liquid Global and Salt making the announcements about pausing withdrawals on November 15th.

Liquid Global announced that it was pausing withdrawals for fiat and crypto both. It said that it was complying with the Chapter 11 bankruptcy proceedings in the US.

It also added that people should not make deposits in either and they would provide further updates once they have them.

FTX Trading Ltd. acquired Liquid Global last year in May, along with its subsidiaries including Quoine. Liquid had not disclosed the terms of the deal at the time.

Salt’s announcement

Not long after Liquid’s announcement, crypto lender Salt also made a similar one, as it informed its clients that they were stopping withdrawals.

Those who received the letter from Salt said on Twitter that Shawn Owen, the CEO of Salt, had penned it. The note said that the business had been impacted due to FTX’s collapse.

It also said that the company needs to assess the damage that has been inflicted, so they were hitting a pause on withdrawals.

The letter to Salt customers said that until they are able to obtain specific details about the extent of the damage from the exposure, they were pausing both deposits and withdrawals.

The news about Salt and Liquid Global pausing withdrawal comes after BlockFi did the same on November 10th.

BlockFi’s move

On November 14th, BlockFi gave an update to its customers and said that they were still not going to resume withdrawals.

The blog post from the crypto lender said that they had realized last week that their operations could not resume as per usual.

It said that since FTX as well as its affiliates were in the midst of bankruptcy proceedings, the sensible approach for them would be to pause the activities on their own platform.

According to people familiar with the matter, there is a strong possibility that BlockFi itself could be filing for Chapter 11 bankruptcy protection soon.

The crypto lender had already been struggling before when FTX had stepped in to bail it out. They had entered an agreement that involved a line of credit and a possible acquisition down the line.

But, with FTX itself in trouble, things are not looking good for BlockFi and there is a chance that it could follow the same route as well.