'Shocked and dismayed' crypto lender BlockFi suspends withdrawals, blaming the FTX mayhem

• BlockFi has halted client withdrawals, blaming the uncertainty around FTX's implosion.
• The crypto lender said it's "shocked and dismayed" by the crisis at Sam Bankman-Fried's exchange.

Crypto lender BlockFi is halting client withdrawals and limiting activity on its platform, caught up in the fallout from the implosion of crypto exchange FTX.

BlockFi blamed the uncertainty about what's happening in Sam Bankman-Fried's empire — the exchange, its US-based counterpart and trading firm Alameda Research.

"We are shocked and dismayed by the news regarding FTX and Alameda," BlockFi said in a Thursday tweet.

"Given the lack of clarity on the status of FTX.com, FTX US and Alameda, we are not able to operate business as usual," it added, saying its priority is to protect its customers and their interests.

The New Jersey-based crypto lender called on clients not to deposit funds to their BlockFi wallets or interest accounts.

The move adds to concerns that the problems at FTX — which needs an $8 billion injection to avoid bankruptcy after customers rushed to pull their deposits — could spread more widely to other crypto firms. JP Morgan said it has created a "confidence crisis" that could see a flood of margin calls and unwinding of leverage and makes more crypto company failures likely.

Bankman-Fried lent a helping hand to BlockFi in June, when he was seen as crypto's white knight. He provided a $250 million loan to bail it out after it was hit by the collapse of crypto hedge fund Three Arrows Capital.

In July, BlockFi confirmed it had given FTX the option to acquire the business for up to $240 million, in a deal that also provided BlockFi with a $400 million revolving credit facility.