Several BAYC and CryptoPunks collectors who put up their tokens as collateral backing for Ethereum loans have been unable to settle their dues. Crypto analysts believe this could mark the onset of the first major liquidation crisis in the NFT industry. BendDAO Loans and Possible Risks Rumors of a liquidation spiral began earlier this week following a post about NFT lending platform BendDAO. BendDAO is a web3 protocol that allows users to take out loans in Ethereum using their non-fungible…
Zac Prince – CEO of crypto lending platform BlockFi – wants people to stop comparing his company to other embattled crypto firms.
He claims there is a qualitative distinction between the magnitude of BlockFi’s troubles compared to Celsius or Voyager’s.
- In a tweet on Monday, Prince called on journalists and commentators to quit “putting BlockFi in the same bucket” as Celsius or Voyager.
“Two months ago we looked the ‘same’,” he said. “They shut down and have impending losses for their clients.”
- By contrast, he said BlockFi has remained “fully functional across all products” including loans, trading, earning interest, and credit cards. The firm even raised interest earned on customers’ deposits in July.
- Rival platform Celsius was forced to freeze customers’ withdrawals in June while it struggled to pay down its outstanding Defi debt.
- The firm recently paid back all debt pertaining to its Maker loan and has since pivoted to covering its Aave and Compound positions. However, where the company is sourcing its liquidity is unclear.
- Meanwhile, Voyager lowered its withdrawal limit before freezing withdrawals entirely in response to Three Arrows Capital’s insolvency. The firm filed for bankruptcy in a New York Court only days later.
- In an update on Monday, Voyager stated that it cannot guarantee the complete return of crypto deposits to customers.
- BlockFi is yet to take such drastic and worrying measures to stay afloat. However, it did make headlines alongside Voyager after both had accepted major credit facilities from Sam Bankman-Fried’s companies. The funding is intended to help BlockFi navigate the crypto winter.
- BlockFi was also forced to lay off 20% of staff last month – in addition to industry titans like Coinbase.
Prince also denied rumors last month that BlockFi was planning to be sold to FTX for just $25 million.