Seeking Alpha
2022-11-28 16:13:32

Crypto lender BlockFi files for Chapter 11 bankruptcy as dominoes fall from FTX failure

Cryptocurrency lender BlockFi said Monday that it filed for Chapter 11 bankruptcy protection in the U.S. in an effort to stabilize and restructure its business following the abrupt downfall of crypto exchange FTX. Major digital tokens, in turn, extended their losses as the ripple effect from FTX's fallout drags on. Bitcoin ( BTC-USD ) dipped 2.6% to $16.09K at 11:13 a.m. ET, and ethereum ( ETH-USD ) slid 4.4% to $1.15K. The company, which is still operating its business, said it will focus on recovering all obligations by its counterparties, though recoveries from FTX are expected to be delayed given its ongoing bankruptcy process, according to a release . An internal plan was also started to "considerably reduce" BlockFi's expenses such as labor costs, the release said, while noting it has $256.9M in cash on hand. BlockFi, meanwhile, is estimated to have over 100K creditors, its petition showed. One of its largest creditors included FTX US's business name, West Realm Shires, with a $275M unsecured claim. Ankura Trust Company was BlockFi's largest creditor by a wide margin with a $730M unsecured claim. The move comes after BlockFi, which received an outsized credit line from FTX earlier in 2022, was forced to suspend client withdrawals earlier in November due to the uncertainty surrounding the status of Sam Bankman-Fried's crypto empire at the time. But even before the collapse of FTX, BlockFi was struggling to keep afloat following regulatory troubles and a broader market downturn. FTX US reached an agreement with BlockFi in July that gave FTX the option to bail out the embattled crypto lender for up to $240M, though the deal never went through due to FTX's recent liquidity crisis. Crypto lender rival Nexo reportedly offered to buy BlockFi for $850M in July, too, but BlockFi turned down that offer and moved forward with FTX US. Previously, (Nov. 16) Bloomberg reported that BlockFi eyed bankruptcy protection .

Crypto 뉴스 레터 받기
면책 조항 읽기 : 본 웹 사이트, 하이퍼 링크 사이트, 관련 응용 프로그램, 포럼, 블로그, 소셜 미디어 계정 및 기타 플랫폼 (이하 "사이트")에 제공된 모든 콘텐츠는 제 3 자 출처에서 구입 한 일반적인 정보 용입니다. 우리는 정확성과 업데이트 성을 포함하여 우리의 콘텐츠와 관련하여 어떠한 종류의 보증도하지 않습니다. 우리가 제공하는 컨텐츠의 어떤 부분도 금융 조언, 법률 자문 또는 기타 용도에 대한 귀하의 특정 신뢰를위한 다른 형태의 조언을 구성하지 않습니다. 당사 콘텐츠의 사용 또는 의존은 전적으로 귀하의 책임과 재량에 달려 있습니다. 당신은 그들에게 의존하기 전에 우리 자신의 연구를 수행하고, 검토하고, 분석하고, 검증해야합니다. 거래는 큰 손실로 이어질 수있는 매우 위험한 활동이므로 결정을 내리기 전에 재무 고문에게 문의하십시오. 본 사이트의 어떠한 콘텐츠도 모집 또는 제공을 목적으로하지 않습니다.