Chicago-based crypto liquidity provider and lender BlockFills has suspended client deposits and withdrawals, citing a downturn in Bitcoin prices. The company, which provides liquidity and lending services to institutional clients in the digital asset space, made the announcement on Wednesday, stating that withdrawals were halted last week as it works to restore liquidity to its platform. BlockFills is actively engaging with its clientele, which includes crypto hedge funds and asset managers, according to a company spokesperson.
The suspension comes after a volatile period in the cryptocurrency market. Digital asset prices have fluctuated significantly, including a sharp 20% drop last week. On January 30, both precious metals and cryptocurrencies experienced heavy sell-offs, triggered by news of Kevin Warsh’s appointment as the next Federal Reserve chair. This appointment raised expectations that Warsh might reduce the Fed’s balance sheet, potentially dampening demand for Bitcoin.
Despite the withdrawal freeze, BlockFills maintains that clients can still open and close positions in both spot and derivatives trading. The company characterises the pause on withdrawals as temporary. BlockFills raised $6 million in 2021 and a further $37 million in 2022 from investors including CME Ventures and Susquehanna Capital. Neither CME Ventures nor Susquehanna Capital have responded to requests for comment.
A spokesperson for BlockFills assured clients that the company is committed to resolving the situation. “BlockFills is working tirelessly to bring this matter to a conclusion and will continue to regularly update our clients as developments warrant,” the spokesperson stated. Bitcoin was last down more than 3% at $66,534, well off its all-time high of above $125,000 in October.
