crypto lending platform BlockFi declares bankruptcy
Crypto winter

FTX collapse : crypto lending platform BlockFi declares bankruptcy

Cryptocurrency lending company BlockFi has filed for Chapter 11 bankruptcy after suspending payments to users earlier this month.

After Celsius, FTX and Voyager Digital, BlockFi is another major player in the crypto industry to file for bankruptcy.

BlockFi Inc. and eight of its affiliates (“BlockFi” or “the Company”) today filed voluntary proceedings under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey (“the Court”) to stabilize its operations and provide the Company with an opportunity to complete a comprehensive restructuring transaction that maximizes value for all customers and other stakeholders.

As part of its restructuring efforts, the Company will focus on collecting all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities (“FTX”).

Due to the recent collapse of FTX and the subsequent bankruptcy process, which is still ongoing, the Company expects that collections from FTX will be delayed,” the bankrupt company said.

In serious financial trouble for months, BlockFi had recently signed a recovery agreement with FTX, which provided a $250 million loan in the process.
But following the collapse of the FTX empire, BlockFi can no longer count on financial support from FTX, which in turn owes billions of dollars to a million creditors!

BlockFi has more than 100,000 creditors

BlockFi’s bankruptcy filing reveals that the company still has $256.9 million in cash to keep it operating.
The documents also reveal that BlockFi owes $30 million to the U.S. regulator SEC and $275 million to its former buyer FTX, among other things.

Mark Renzi of Berkeley Research Group, BlockFi’s financial advisor, said:

“With the collapse of FTX, BlockFi’s management team and board of directors took immediate action to protect customers and the company.

Documents from the proceeding further indicate that BlockFi has more than 100,000 creditors and liabilities of between $1 billion and $10 billion.

This bankruptcy proceeding in the United States will now protect BlockFi from its creditors so that it can maintain its business and find a potential buyer or sell its assets to the highest bidder, as in the case of Voyager Digital (VGX) which could finally be taken over by Binance, click here to read our article.

This major crypto player now in bankruptcy has negatively impacted the Bitcoin price which has dropped below the $16,000 level, click here to follow the BTC price live.

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