The madness revolving around FTX does not stop. BlockFi is now the first expected victim of a contagion effect that could have the crypto market in its grip in the coming weeks.

Contrary to Sam Bankman-Fried’s claims, however, the US exchange FTX.us could also be on the verge of a trading and withdrawal halt. The CEO still emphasized yesterday that the US exchange is a separate company from its global business and will continue to function properly.

“The US based exchange that accepts Americans, was not financially impacted by this shitshow. It’s 100% liquid. Every user could fully withdraw (modulo gas fees etc). Updates on its future coming,” as Bankman-Fried tweeted just yesterday.

However, in a message suddenly pinned to the US trading page yesterday, the company warned users, “Trading may be halted on US based exchange in a few days. Please close down any positions you want to close down. Withdrawals are and will remain open. We will give updates as we have them.”

As some credible sources now confirm who are very close to the situation, FTX US could be in danger as well. The international company and the exchange are closely intertwined. Joint contracts, with both entities, have been made within the framework of sponsorship agreements.

In addition, multiple anonymous sources confirm that Bankman-Fried suggested both entities for potential capital raises in internal messages. Autism Capital, a Twitter account close to the sources, wrote cautionary:

PSA: If you’re currently in FTXUS (why?) we’d *very seriously* consider getting out now. If Alameda/FTX Intl. has commingled funds *at all* with FTXUS the exchange will have bankruptcy claim risk aka the world will be coming for your money. Pay attention.

FTX Contagion Brings BlockFi Down

A few hours ago the first contagion victim became known. The lender BlockFi published a statement that all payouts will be stopped until further notice:

We are shocked and dismayed by the news regarding FTX and Alameda. […] Given the lack of clarity on the status […], we are not able to operate business as usual. Our priority has been and will continue to be to protect our clients and their interests. Until there is further clarity, we are limiting platform activity, including pausing client withdrawals […].

There are rumors that BlockFi has nearly 100% of its clients’ assets stashed at the platform of Bankman-Fried. In addition, sources from Autism Capital claim that the US exchange lent $200-400 million to BlockFi and now there is a gap in FTX US balance sheet/equity.

“BlockFi has a $400M line of credit which an insider is confirming has been tapped. This directly contradicts SBF’s earlier statement that FTX US is not affected,” according to Autism Capital.

As also leaked earlier, BlockFi has already hired a bankruptcy counsel today.

The Bitcoin price continues to be subject to high volatility. The price was able to temporarily rise above $18,200. However, at press time, BTC had already posted a drop of $800 from this daily high.