Cryptocurrency lending platform BlockFills suspends customer withdrawals, triggering painful memories of the "FTX collapse" in the crypto community

Chicago-based cryptocurrency lending platform BlockFills presses the “pause” button amid market volatility, sparking concerns over a liquidity crisis.

According to the latest report from the Financial Times, crypto lending and liquidity provider BlockFills has halted customer withdrawals and restricted platform trading, highlighting the severe impact recent digital asset market turbulence has had on institutional players.

This Chicago-headquartered company implemented measures to suspend customer deposits and withdrawals last week, and these restrictions remain in place. While customers are still allowed to trade under certain conditions to manage their positions, the freezing of funds undoubtedly signals liquidity stress to the market.

A BlockFills spokesperson stated: “In light of recent market and financial conditions, to further protect our clients and the company, BlockFills took the temporary step of suspending customer deposits and withdrawals last week.” The management team is currently working closely with investors and clients to resolve the issue swiftly and restore platform liquidity.

This move has touched a nerve among investors. As Bitcoin’s price fell below $65,000, a major institutional-focused lending platform faced repayment difficulties, reminiscent of the 2022 crypto credit crisis that swept through the industry, which saw multiple lenders collapse and ultimately led to the FTX exchange’s downfall.

Institutional Pressure and Industry Backing

BlockFills is not a small platform catering to retail investors; its turmoil directly impacts the crypto market’s “whales.”

According to its website, the company provides liquidity and lending services to approximately 2,000 institutional clients, including crypto-focused hedge funds and asset management firms. Its options products have very high entry thresholds, only open to investors holding over $10 million in digital assets.

By 2025, the company’s trading volume reached as high as $60 billion. Since its founding in 2018, BlockFills’ expansion has been supported by heavyweight capital, including Susquehanna International Group and the corporate venture arm of CME Group, the world’s largest derivatives exchange.

In response to this crisis, CME declined to comment, and Susquehanna did not immediately respond to requests for comment regarding the withdrawal suspension. This silence has heightened market fears of a broader crisis spreading.

The Shadow of the 2022 Crypto Winter Reemerges

BlockFills’ decision to lock customer funds comes just three years after a major downturn in the crypto market. The current situation bears a striking resemblance to the 2022 “crypto winter.”

Back then, the Federal Reserve’s rate hikes triggered a global sell-off of risk assets, causing the crypto market to lose nearly 70% of its market cap. Under liquidity pressures, lenders like Celsius, BlockFi, Vauld, Genesis, and Voyager paused withdrawals before collapsing. This string of defaults culminated in the collapse of FTX, the crypto exchange founded by Sam Bankman-Fried.

BlockFills’ current predicament indicates that, despite increased industry focus on compliance and risk management, the risks of high leverage and liquidity mismatches remain when asset prices plummet sharply. The company’s spokesperson emphasized that clients can still trade on the platform “for opening and closing spot and derivatives positions,” but this has not fully alleviated market concerns over fund safety.

Bitcoin Price Halved and Policy Deadlock

The macro backdrop for the withdrawal suspension is a broad correction in the crypto market. Last week, Bitcoin’s price fell below $65,000 for the first time since 2024.

As the world’s leading cryptocurrency by market cap, Bitcoin reached a peak of nearly $125,000 late last year. The rally was driven by optimism over President Donald Trump’s administration appointing industry-friendly regulators, halting enforcement actions against crypto firms, and positive expectations for stablecoin regulation.

However, the situation quickly turned. Since reaching its peak in October last year, Bitcoin has fallen about 45%, with nearly 25% decline this year alone.

On October 10, the market experienced the worst single-day sell-off in history, with billions of dollars in leveraged crypto positions forcibly liquidated.

Additionally, the sell-off triggered by threats of tariffs from the Trump administration and legislative stagnation in the U.S. this year further dampened market sentiment, leading to continued liquidity tightening, which ultimately impacted intermediaries like BlockFills.

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