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“Given the lack of clarity on the status of FTX.com, FTX US and Alameda, we are not able to operate business as usual,” BlockFi said, adding that its priority is to protect its clients.

READ FTX crisis bruises BlackRock, VanEck: ‘Crypto industry will need to work twice as hard to rebuild bridges’

BlockFi, based in Jersey City, N.J., obtained a financial lifeline from FTX this past summer after steep declines in crypto prices set off a liquidity crisis that engulfed many lenders. FTX provided BlockFi with a $400m revolving credit facility in a deal that also gave the exchange an option to purchase the lender.

FTX plunged into its own crisis this week, after it became swamped by client withdrawal requests over the weekend. The exchange had lent billions of dollars in customer assets to fund risky trading bets by Alameda, setting the stage for the exchange’s implosion, The Wall Street Journal reported.

On 7 November, BlockFi’s founder and chief operating officer, Flori Marquez had said on Twitter that all of the company’s products were fully operational and that the lender was processing client withdrawals.

Marquez also said that the lender’s line of credit was from FTX US, not FTX.com, and that BlockFi would be an independent entity until at least next July. FTX, based in the Bahamas, doesn’t provide services to American users. They use FTX’s U.S.-based exchange, whose offerings are more limited.

In its latest post, the lender requested that clients not make deposits to their BlockFi digital wallets or accounts, and promised further updates.

Bankman-Fried has told investors that he needs emergency funding to cover a shortfall of up to $8bn due to withdrawal requests received in recent days. FTX saw roughly $5bn of withdrawals on 6 November — the most ever by a huge margin, he said.

Alameda had used FTX’s FTT tokens as collateral for loans it took out from crypto lenders, including BlockFi, according to people familiar with the matter. The FTT tokens have fallen sharply in value this week.

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In a series of tweets earlier on 1o November, Bankman-Fried said Alameda will wind down trading. He said FTX is working to raise money after rival Binance walked away from a plan to take over his exchange, and told employees the potential fundraising could be in the form of an infusion for FTX and FTX US.

The exchange’s sudden difficulties have also created problems for other crypto players. Crypto.com, another major exchange, suspended deposits and withdrawals of two stablecoins, USDC and USDT, on the Solana blockchain on 9 November. Its chief executive, Kris Marszalek, tweeted that the exchange disabled them to minimize additional risks because FTX was an important venue for stablecoins based on that blockchain.

—Caitlin Ostroff and Vicky Ge Huang contributed to this article.

This article was published by The Wall Street Journal, part of Dow Jones