Crypto company BlockFi has filed for Chapter 11 bankruptcy protection following the bankruptcy of FTX. Thus, BlockFi became the latest in a series of crypto bankruptcies after FTX, Voyager, and Celsius. The crypto company liquidated some of its crypto assets today.
BlockFi has gone the way of FTX!
Troubled crypto firm BlockFi has filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of New Jersey following the bankruptcy of crypto exchange FTX. In the filing, the company stated that it has more than 100,000 creditors with debts and assets ranging from $1 billion to $10 billion. In the filing, the company listed an outstanding $275 million loan to FTX USA, the American arm of Sam Bankman-Fried’s now-bankrupt empire.
Meanwhile, BlockFi, which filed for bankruptcy, also started asset liquidation. In this context, he announced today that he has sold some of his cryptocurrencies. The company stated that the purpose of the sale was to finance its commercial and administrative activities. BlockFi noted that it turned $238 million 600 thousand of its crypto assets into cash. In addition, the company announced that it had 256 million 900 thousand dollars in cash in its bankruptcy filing.
A BlockFi subsidiary also filed for bankruptcy in Bermuda simultaneously with the American filing. Like the Bahamas, Bermuda has embraced crypto as the future of finance. Both have created frameworks specifically for dealing with crypto assets and digital currencies. Both the Bahamas with FTX bankrupt and now Bermuda with BlockFi bankrupt are facing the first major legal tests of crypto regulations.
BlockFi’s list of creditors
BlockFi’s largest creditor is Ankura Trust, which represents creditors in stressful situations and owes $729 million. Valar Ventures, a Peter Thiel-affiliated venture capital fund, owns 19% of BlockFi’s shares.
BlockFi also listed the U.S. Securities and Exchange Commission as one of its largest creditors, with a claim of $30 million. In February, a subsidiary of BlockFi agreed to pay $100 million to the SEC and 32 states in connection with a retail crypto loan product the company is offering to nearly 600,000 investors.
In a blog post, BlockFi said Chapter 11 cases will enable the company to stabilize its business and maximize value for all stakeholders. “It is our priority to act in the best interests of our customers. It continues to guide our way forward.”
As we reported as Kriptokoin.com, BlockFi had previously stopped withdrawals from its platform. The company filed for bankruptcy, saying it hired Kirkland & Ellis and Haynes & Boone as bankruptcy advisors and Berkeley Research Group as financial advisors. At the end of June, a third of BlockFi’s $1.8 billion in outstanding loans were unsecured, according to the company.
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