FTX has left multiple associated projects and platforms staring at decline since its insolvency. Though the consequences remained limited to monetary and ethical terms, a new move by California financial regulator confirmed a change toward regulatory crackdown.
BlockFi Lending License Suspended
California’s DFPI (Department of Financial Protection & Innovation) oversees all lending and banking operations in the state. The regulator’s press release confirmed that BlockFi might no longer conduct lending activities in the state.
Moreover, DFPI informed about suspending the firm’s lending license. The announcement indicated that BlockFi ceased providing loan services in California. Also, the regulator revealed that it had kick-started a probe into BlockFi’s latest conduct.
That includes its move to suspend withdrawals and restrict activity on its network. Nevertheless, BlockFi stated that it couldn’t continue operating as usual because of an absence of clarity on the state of FTX US, Alameda, and FTX.com.
Beware that it isn’t the first time BlockFi crosses with DFPI. DFPI Commissioner ordered the lending firm to desist from selling or offering non-exempt, unqualified securities as BlockFi interest accounts in California.
The FTX Association
Multiple companies operating in the cryptocurrency industry had to launch layoffs following the Terra debacle. Several lenders and exchanges went bankrupt. BlockFi was among the lenders. Meanwhile, BlockFi exec Zac Prince revealed a $250M term sheet with FTX (on June 21).
That came after weeks of worry about the firm’s future. That represented Sam Bankman-Fried’s initial bailouts, which saw him earning the cryptocurrency’s White Knight title.
Prince expanded his announcement on July 1, confirming extending the deal to cover $400M credit from FTX and an option for acquisition at up to $420 million price. The press release valued the deal at a staggering $680 million.
The crypto market remained downside since the FTX crisis emerged. Bitcoin dropped approximately 21.62% of its value within the past week, changing hands at $16.626.68 during this publication.
The altcoin market seems to have suffered the most. Ethereum lost 23.80% over the last week, trading at $1,239 during this publication.
Stay tuned for the latest crypto news.