Crypto lender BlockFi goes bankrupt in aftermath of FTX
BNN Bloomberg
Lender BlockFi filed for bankruptcy, the latest digital-asset firm to collapse in the wake of crypto exchange FTX’s rapid downfall.
BlockFi said in a statement Monday that it will use the Chapter 11 process to “focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities,” adding that recoveries are likely to be delayed by FTX’s own bankruptcy. Chapter 11 bankruptcy allows a company to continue operating while working out a plan to repay creditors.
The petition, filed in New Jersey, lists BlockFi’s assets and liabilities at between US$1 billion and US$10 billion each. The company said in the statement that it had around US$257 million of cash on hand, and is starting an “internal plan to considerably reduce expenses, including labor costs.”
Citing “a lack of clarity” over the status of bankrupt FTX and Alameda Research, the Jersey City, New Jersey-based company earlier halted withdrawals and said it was exploring “all options” with outside advisers.
