The next unexploded bomb? Blockfi was exposed to a liquidity crisis after Celsius, Three Arrows Capital, and SEC fined |

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下個未爆彈?Blockfi 遭爆在 Celsius、三箭資本、SEC罰款事件後出現流動性危機
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Cryptocurrency analyst Otteroooo tweeted today (17th) that BlockFi’s liquidity has been affected due to Celsius, Three Arrows Capital and SEC fines, and said that a liquidity crisis may be triggered by the end of 2022. (Recap:Three Arrows Capital was unable to complete the “margin call” and was liquidated by Blockfi, and now sells another 14,000 stETH for emergency!) (background supplement:Can’t stand it anymore!Crypto lending platform BlockFi halved deposit rates for Solana, Avalanche, Polygon and more)

addCryptocurrency analyst Otteroooo tweeted today (17th) a detailed analysis of the current situation of the Cefi platform BlockFi, saying that BlockFi is likely to be in crisis, because of the recent incidents of Celsius, Three Arrows Capital and SEC fines. , is likely to suffer a liquidity crisis by the end of 2022.

Otteroooo mainly divided the reasons into five reasons in Twitter: first, the first two are the influence of Celsius and Three Arrows Capital, and the second is BlockFi’s wrong bet, the SEC’s fine, and Blockfi’s current coping strategy.

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The following is an excerpt from the Chinese version of Otteroooo’s twitter content, which does not represent the position of the movement area.

Celsius and the Three Arrows Problem

Otteroooo mentioned in the tweet that because of Celsius, more than 2,000 BTC and 5,000 ETH and other assets flowed out of BlockFi wallets in just one day yesterday (16th), because a large number of users are giving up their profits and redeeming assets at any cost. .

On the other hand, Three Arrows Capital is more complicated. They will borrow funds from many Cefi institutions and then put them into the market. However, it is obvious that Three Arrows Capital is insolvent, so it cannot repay the due loan to Blockfi. Otteroooo believes that Blockfi may have lent all of the assets of most users to Three Arrows Capital, which he called the situation unrecoverable.

Wrong bet on GBTC

Blockfi is currently the largest holder of GBTC, but due to the fact that the bitcoin spot futures promoted by Grayscale have not been able to pass the SEC review and listing, there is also a negative premium of GBTC in the market, which can be purchased at a 23% discount on bitcoin prices. GBTC, but currently GBTC cannot be redeemed in BTC, which makes BlockFi short-term liquidity needs only two options, one is to sell GBTC at a low price, and the other is to wait for the SEC’s regulatory attitude to change significantly, making Grayscale push The bitcoin spot ETC can only be exchanged back to the spot ETF, but obviously this road is obviously worse.

Otteroooo said that this is BlockFi’s belief that before the liquidity problem occurs, the conversion of GBTC to a spot ETF may pass first, so this bold bet is made, but it is likely to lose the bet in this regard.

SEC fines

At the beginning of 2022, BlockFi sold encrypted asset lending products to 600,000 investors without the permission of the SEC, attracting customer lawsuits from the SEC and nearly 32 states in the United States. In the end, BlockFi compromised and settled with $100 million in compensation to customers. .

In addition to this time, Otteroooo also said that many sporadic lawsuits are happening, such as the $943,000 settlement paid in Iowa two days ago, which may be just the tip of the iceberg in many lawsuits over the BlockFi controversy. .

BlockFi’s procrastination strategy

Otteroooo also analyzed the current policies of BlockFi. The first is to find an excuse to delay the withdrawal speed of customers, the second is to modify the terms of service before the outbreak, the third is to lay off 20% of the staff, and the fourth is to cause Some technical failures, or KYC reasons, make it impossible for customers to withdraw funds smoothly. The fifth is to send out market-disrupting messages and delay the progress of various unit investigations.

Otteroooo also cited BlockFi’s official statement response when the Three Arrows Capital rumors broke out, saying it did not answer the question positively:

Our policy is not to comment on whether an organization is a client of BlockFi. We can confirm that we have always adhered to strict, prudent, and proactive risk management in our business, including thinking about the risks that may be brought to individual customers. -blockfi agency

📍Related reports📍

BlockFi pays “$100 million” fine to 32 US states and SEC!Lending product BIA charged with securities law violations

Wall Street Journal: Celsius investors seem reluctant to provide financial assistance and are willing to go through “acquisition or bankruptcy reorganization”

Three Arrows Capital was exposed to concealing that the lender “borrowed hundreds of millions of magnesium to Anchor for arbitrage”, and also sold USDD to trigger decoupling

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