The bankruptcy filing reveals the scale of the challenge BlockFi is facing.
Crypto loan firm BlockFi has announced that it plans to file for bankruptcy following the FTX crisis. The company stopped withdrawals in the past weeks and it was stated that it will not be easy to do business as usual given the uncertainty about FTX. Last night, the company announced that it would file for bankruptcy.
How Much Does BlockFi Owe Its Creditors?
BlockFi estimates it has more than 100,000 creditors on its ledgers and owes more than $1 billion to the three largest.
A court document indicates that one of the creditors was the US Securities and Exchange Commission with a hefty $30 million. This is linked to a $100 million settlement agreed in February following the crypto loan product’s failure to register its offerings and sales.
Overall, the largest unsecured creditor is Ankura Trust Company, which acts as a trustee for the interest-bearing accounts BlockFi offers. He owes this company $729 million.
These shares were allegedly used as collateral in the days before the collapse of FTX, creating a contagion effect that spread to the crypto industry.
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