Another Crypto Firm Files for Bankruptcy as a Result of FTX Implosion BlockFi, a crypto firm, has filed for bankruptcy in US. The filing of bankruptcy comes as the aftermath of the implosion and eventual bankruptcy of FTX
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BlockFi, a crypto firm, has filed for bankruptcy in US. The filing of bankruptcy comes as the aftermath of the implosion and eventual bankruptcy of FTX. The company had halted most of its activity and cited 'significant exposure' to FTX for the halt.
The company was seeking protection from court in order to restructure, settle its debts as well as recover money for investors. FTX had offered BlockFi a rescue deal earlier this year as the value of cryptocurrencies took a dive. However, FTX could not stabilize its own ship as the company imploded and eventually filed for bankruptcy as the users of FTX pulled their money amid doubts about its finances.
Sam Bankman-Fried resigned from the company and declared bankruptcy which sent shockwaves through the entire space. FTX was the second biggest crypto exchange globally before its bankruptcy saga.
A court filing suggested that BlockFi owed money to more than 100,000 creditors. The company had listed FTX as its second-largest creditor with $275 million owed on a loan extended earlier this year. The company also owes $30 million to the US financial regulator, the Securities and Exchange Commission. The SEC had found the firm had misled the people about the risk levels in its lending activity as well as the loan portfolio and had failed to properly register its products.
BlockFi had received investments from the likes of Bain Capital Ventures and Tiger Global. With crypto values soaring last year, the company claimed to have managed more than $15 billion in assets.
