Several companies have been impacted by FTX's ongoing collapse and are taking action to deal with the fallout.
Key Takeaways
- Visa has announced that it will break off its partnership with FTX following the exchange's collapse.
- Elsewhere, BlockFi said it will continue suspending withdrawals due to its exposure to FTX.
- Finally, Crypto.com saw high withdrawals this weekend due to concern about an erroneous transaction.
The fallout from the FTX saga continued over the weekend and into Monday with little sign of slowing.
FTX Breaks Off Visa Partnership
Visa has ended its partnership with FTX.
On Sunday, a Visa (NYSE:V) spokesperson said that the company has “terminated [its] global agreements with FTX” and that its payments card program with Bankman-Fried’s company is being “wound down.”
FTX originally introduced its Visa-powered payment cards in January. It announced that it would extend the availability of those cards to 40 other countries in October before news of its collapse and bankruptcy last week.
Visa called FTX’s failure “unfortunate” and said it is “monitoring developments closely.” Visa, which works with at least 65 other crypto firms, said that its digital currency efforts would continue with a focus on security and trust.
BlockFi Suspension Continues
BlockFi, meanwhile, has fully admitted 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 credit line from FTX.US.
BlockFi said it would attempt to regain its funds throughout the failed exchange’s bankruptcy process. The firm said it has sufficient liquidity to explore its options and is working with financial advisors and outside counsel.
It is unclear exactly how much is BlockFi is owed. However, the firm denied that most of its assets are custodied with FTX, emphasizing that any such rumors are false.
BlockFi suspended withdrawals on Friday, Nov. 11, due to FTX’s collapse 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 bank run this weekend.
On Oct. 21, the exchange performed 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 around the incident peaked this weekend. On Saturday, Nov. 12, Crypto.com saw $53 million in user withdrawals in the 10.5 hours following 7 p.m. EST.
In a statement to the Wall Street Journal, a Crypto.com representative admitted that the exchange saw high withdrawals but said that “fluctuations in deposit and withdrawal activity [do] not affect our levels of service.” Crypto.com apparently avoided illiquidity as it moved $33 million from other wallets to meet user demand.
The bank run also coincided roughly with FTX’s collapse, possibly motivating 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 from FTX. The exchange reportedly now has just $10 million of exposure.
FTX’s collapse continues to be a focus in the news cycle. Other companies will likely disclose connections and exposure to the failed exchange as time goes on.