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November 14, 2022 BlockFi Update

Published, 14 November, 2022

Dear BlockFi Clients,

We know the past few days have been incredibly difficult for you. We are deeply saddened to see the devastation that is cascading across an industry that we love and believe in, touching the lives of so many people. Our top priority remains doing the best we can for our clients.

After everything we accomplished this summer to protect BlockFi, last week’s news regarding FTX was unexpected for us at BlockFi and for so many others. We are working around the clock to evaluate all of our available options.

Where do things stand today?

We determined late last week that in the current environment we could no longer operate our business as usual. Given that FTX and its affiliates are now in bankruptcy, the most prudent decision for us, in the interest of all clients, is to continue to pause many of our platform activities for now.

The rumors that a majority of BlockFi assets are custodied at FTX are false. That said, we do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US. While we will continue to work on recovering all obligations owed to BlockFi, we expect that the recovery of the obligations owed to us by FTX will be delayed as FTX works through the bankruptcy process.

At this time, withdrawals from BlockFi continue to be paused. We also continue to ask clients not to submit any deposits to BlockFi Wallet or Interest Accounts.

Regarding our credit card product, BlockFi relies on partners to deliver the credit card product. BlockFi handles any distribution of rewards. Customers may have received communication that didn't originate from BlockFi, but from our partners, Evolve Bank and Deserve. We are working with our partners and intend to directly provide further details on our credit card program as and when appropriate.

What’s next?

There are a number of scenarios that may be available to us, and we are doing the work now to determine the best path forward. BlockFi has the necessary liquidity to explore all options and we have engaged expert outside advisors that are helping us navigate BlockFi’s next steps. Haynes and Boone continues to serve as our primary outside counsel, and BRG has been engaged as our financial advisor.

As we work expeditiously through this quickly evolving situation, we are focused on doing the utmost to be transparent around decisions related to our pause, products, and platform activity.

Across BlockFi, our team is working tirelessly towards our primary objective of maximizing value for all of our clients, and that will see us explore every strategic option available to us.

We will do our best to communicate through our official channels as often and transparently as possible going forward but expect these explorations may take time. We appreciate your patience during this period.

The BlockFi Team

Last updated on November 14th, 2022

BlockFi News

As of February 14, 2022, the BlockFi Interest Account (BIA) is no longer available to new clients who are US persons or persons located in the US and existing US clients with BIA accounts are unable to transfer new assets to their BIAs. Learn More.

BlockFi Lending LLC NMLS ID#1737520 | NMLS Consumer Access

BlockFi Trading LLC NMLS ID#1873137 | NMLS Consumer Access

Digital currency is not legal tender, is not backed by the government, and crypto accounts held with BlockFi are not subject to FDIC or SIPC protections. Digital currency values are not static and fluctuate due to market changes. Not all products and services are available in all geographic areas and are subject to applicable terms and conditions. Eligibility for particular products and services is subject to final determination by BlockFi. Rates for BlockFi products are subject to change.

BlockFi Rewards Credit Card: For more information, please see BlockFi’s Terms of Service. BlockFi is not a Bank. Cards are issued by Evolve Bank & Trust, Member FDIC, pursuant to a license from Visa® USA Inc. Rewards are not offered by Evolve Bank & Trust and are instead offered and managed by BlockFi.

BlockFi International Ltd. holds a Class F digital assets business license under the Digital Assets Business Act, 2018 (as amended) and is licensed by the Bermuda Monetary Authority to conduct the following digital assets business activities: (i) issuing, selling or redeeming virtual coins, tokens or any other form of digital assets (ii) operating as a digital asset exchange (iii) providing custodial wallet services (iv) operating as a digital asset derivative exchange provider and (v) operating as a digital assets services vendor.

See blockfi.com/terms for more information.

BlockFi Lending LLC NMLS ID#1737520 | NMLS Consumer Access

BlockFi Trading LLC NMLS ID#1873137 | NMLS Consumer Access

See blockfi.com/terms for more information.

November 14, 2022 BlockFi Update

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