Cryptocurrency lender BlockFi files for bankruptcy

Distressed crypto firm BlockFi files for bankruptcy as fallout of FTX spreads: Lender with more than 100,000 creditors was set to be acquired by Sam Bankman-Fried’s firm

  • Company filed for bankruptcy on Monday morning
  • Filing said it has more than 100,000 creditors and liabilities and assets of up to $10 billion
  • BlockFi said: ‘This action follows the shocking events surrounding FTX’
  • FTX filed for bankruptcy earlier this month, causing cryptocurrency values to plunge and triggering a crisis at several other companies who used FTX
  • BlockFi had paused client withdrawals on November 10 after the collapse of FTX
  • In July, FTX provided BlockFi with a $400 million credit facility and agreed an option to buy it for up to $240 million

Cryptocurrency lender BlockFi has filed for bankruptcy – blaming the ‘shocking events surrounding’ the collapse of FTX.

A filing said the company has more than 100,000 creditors and liabilities and assets of up to $10 billion.

The company’s website was still live on Monday morning – but included a message about the bankruptcy case.

A statement from BlockFi said: ‘This action follows the shocking events surrounding FTX and associated corporate entities (“FTX”) and the difficult but necessary decision we made as a result to pause most activities on our platform.

‘Since the pause, our team has explored every strategic option and alternative available to us, and has remained laser-focused on our primary objective of doing the best we can for our clients.

A statement from BlockFi, which has filed for bankruptcy, said: 'This action follows the shocking events surrounding FTX.'

A statement from BlockFi, which has filed for bankruptcy, said: ‘This action follows the shocking events surrounding FTX.’

‘These Chapter 11 cases will enable BlockFi to stabilize the business and provide BlockFi with the opportunity to consummate a reorganization plan that maximizes value for all stakeholders, including our valued clients.’

The company added: ‘We apologize that communication with our clients has not been as frequent as you have come to expect from us.

‘We look forward to transparency through our reorganization, and will work to keep clients and stakeholders informed as we make progress.’

In a court filing, New Jersey-based BlockFi said it owes money to more than 100,000 creditors. It listed crypto exchange FTX as its second-largest creditor, with $275 million owed on a loan extended earlier this year.

The company’s largest creditor is Ankura Trust, a company that represents creditors in stressed situations, and is owed $729 million.

FTX filed for bankruptcy on November 11. 

The distressed crypto trading platform had struggled to raise billions to stave off collapse as traders rushed to withdraw $6 billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal’.

In July, FTX had signed a deal with BlockFi to provide the firm with a $400 million revolving credit facility and an option to buy it for up to $240 million after the crypto lender was hit by a collapse in prices earlier in the year. 

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