FTX Fallout Continues: Visa Dumps FTX, BlockFi Still Suspended, Crypto.com Skirts a Bank Run


key takeaways

  • Visa has announced that it will break its partnership with FTX following the collapse of the exchange.
  • Separately, BlockFi said it will continue to suspend withdrawals due to its exposure to FTX.
  • Finally, Crypto.com saw large withdrawals this weekend due to concerns over an erroneous transaction.

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The fallout from the FTX saga continued through the weekend and into Monday with little sign of slowing down.

FTX breaks the visa association

Visa has ended its association with FTX.

On Sunday, a Visa spokesman said the company has “finished [its] global agreements with FTX” and that its payment card program with the Bankman-Fried company is being “terminated”.

FTX originally introduced its Visa-powered payment cards in January. It announced that it would extend the availability of those cards to another 40 countries in October before the news of its collapse and bankruptcy last week.

Visa called FTX’s failure “unfortunate” and said it is “closely monitoring developments.” Visa, which works with at least 65 other crypto companies, said its digital currency efforts would continue to focus on security and trust.

BlockFi suspension continues

Meanwhile, BlockFi has fully admitted its exposure to FTX.

On Monday, BlockFi revealed that it has “significant exposure to FTX” and its related companies, including obligations owed by Alameda Research, assets held at FTX.com, and a line of credit from FTX.US.

BlockFi said it would try to recover its funds during the bankruptcy proceedings of the failed exchange. The firm said it has sufficient liquidity to explore its options and is working with outside financial advisers and lawyers.

It’s unclear exactly how much is due to BlockFi. However, the firm denied that most of its assets are in the custody of FTX, stressing that such rumors are false.

BlockFi suspended withdrawals on Friday, November 11, due to the collapse of FTX and asked clients not to make deposits at that time. The company said today that it will “continue to pause many of [its] platform activities.

Crypto.com Survives Bank Run

Finally, Crypto.com faced a run on the bank this weekend.

On October 21, the exchange made an erroneous transaction as it accidentally sent 320,000 ETH ($400 million) to a Gate.io wallet. The incident occurred weeks ago but was not widely publicized on social media until recently.

Concerns surrounding the incident peaked this weekend. On Saturday, November 12, Crypto.com recorded $53 million in user withdrawals in the 10.5 hours after 7 pm EST.

in a statement To the Wall Street Journal, a Crypto.com representative admitted that the exchange saw large withdrawals, but said that “fluctuations in deposit and withdrawal activity [do] it will not affect our service levels.” Crypto.com apparently avoided the liquidity crunch as it moved $33 million from other wallets to meet user demand.

The bank run also roughly coincided with the FTX collapse, possibly prompting investor concern. However, Crypto.com insists it has minimal exposure to FTX: The exchange’s CEO, Kris Marszalek, said today that his company had recovered $990 million worth of FTX. The exchange now reportedly has only $10 million of exposure.

The FTX crash continues to be a focus in the news cycle. Other companies are likely to disclose connections and exposure to the failed exchange as time goes on.

Disclosure: At the time of writing, the author of this article owned BTC, ETH, and other digital assets.

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