BlockFi Files for Bankruptcy Following FTX Crash

Another former cryptocurrency giant has filed for Chapter 11 bankruptcy protection in the United States.

Thus, BlockFi has followed the example of companies like Celsius and Three Arrows Capital.

• The cryptocurrency lender’s troubles began as the bear market intensified earlier this year, especially after the Terra collapse.
• There seemed to be a lifeboat thrown by FTX a few months down the road as the exchange provided a $400 million loan to BlockFi and had the option to purchase the company for up to $240 later on.
• However, the once SBF-led giant crashed spectacularly earlier this month, which led to a new wave of problems.
• Some reports emerged claiming that BlockFi was exploring filing for bankruptcy, but company reps refuted them at first.
• Yet, the crypto lender has indeed filed for Chapter 11 bankruptcy protection in a New Jersey court, as reported by CNBC.
• The filing reads that BlockFi had over 100,000 creditors and its liabilities were somewhere between $1 billion and $10 billion.

“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.” – a company spokesman had previously said.

• This year has already seen its fair share of bankruptcy filings in the crypto industry. Celsius was among the first, followed by 3AC, Voyager, and more.