[Bitcoin Now] Crypto Lender BlockFills Halts Withdrawals... "Fallout From Bitcoin Plunge"

Virtual asset lending firm BlockFills has suspended withdrawals and restricted trading. The move is analyzed as having been influenced by the recent increase in volatility in the virtual asset market.

The Financial Times (FT) reported on the 11th (local time) that BlockFills halted client deposits and withdrawals as prices of Bitcoin and other virtual assets fluctuated sharply over the past few days. The report added that this suspension measure, which was implemented last week, remains in place, while some transactions such as opening and closing positions in spot and derivatives trading are still available.

Chicago-based BlockFills provides liquidity and lending services to about 2,000 institutional investors, including hedge funds and asset management firms. It has also received investment from Susquehanna, a major U.S. trading and investment company, and from the venture investment arm of CME Group, the Chicago Mercantile Exchange operator. Citing data from market data provider PitchBook, Reuters reported that BlockFills raised 6 million dollars in 2021 and an additional 37 million dollars in 2022.

FT pointed out that this withdrawal restriction comes three years after the virtual asset market last experienced a major downturn. The year 2022 was so brutal that it was dubbed the "crypto winter." Bitcoin climbed to around 69,000 dollars at the end of 2021, but within a year it plunged to the 16,000?dollar range. Several trillion dollars in total market capitalization evaporated. Beginning with the collapse of the Terra-Luna stablecoin project in May of that year, major lending and investment firms such as Celsius and Three Arrows Capital (3AC) shut down, and FTX, which had been a large virtual asset exchange, also went bankrupt.

A BlockFills spokesperson said, "In light of recent market and financial conditions and in order to enhance protections for our clients and the company, BlockFills took the step last week of temporarily suspending client deposits and withdrawals," adding, "Management is working closely with investors and clients to resolve this matter swiftly and to restore liquidity on the platform."

Foreign media outlets explained that BlockFills' move came in the wake of the recent sharp decline in Bitcoin. Bitcoin hit an all-time high in October last year, surpassing 125,000 dollars. However, as former Fed Governor Kevin Warsh was nominated as the next Federal Reserve Chair, concerns emerged that expectations for a baseline interest rate cut were weakening, and Bitcoin turned downward. It is currently trading in the 67,000?dollar range, down by around 45% from its peak.