Deepening with the collapse of FTX cryptocurrency There has been a new development in the crisis and BlockFi has announced that it has filed for Chapter 11 bankruptcy.
BlockFi Files for Bankruptcy
A source from the company said in a statement that BlockFi will file for Chapter 11 bankruptcy protection later today.
The source said that the cryptocurrency lender also laid off a large portion of its staff.
“BlockFi Inc. and its eight subsidiaries today volunteer under Chapter 11 of the US Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey to stabilize their businesses and provide the company with the opportunity to undertake a comprehensive restructuring that maximizes value for all customers and other stakeholders. initiated a lawsuit.
As part of its restructuring efforts, the company will focus on recovering all liabilities owed to BlockFi by its counterparties, including FTX and associated legal entities. Due to FTX’s recent collapse and subsequent bankruptcy process, the company expects recoveries from FTX to be delayed.”
Mark Renzi of Berkeley Research Group, the company’s financial advisor, said of the latest development:
“With the collapse of FTX, the BlockFi management team and board took immediate action to protect customers and the company. Since its inception, the company has worked to positively shape and advance the cryptocurrency industry. The company looks forward to a transparent process that will achieve the best outcome for all customers and other stakeholders.”
BlockFi, which allows users to earn returns by depositing their idle cryptocurrencies on the platform, first stopped withdrawals on November 11, the day FTX filed for bankruptcy. BlockFi used the following statements in a letter he wrote at the time:
“Like the rest of the world, we learned about this via Twitter. We were shocked and appalled by the news about FTX and Alameda.”
The activities of the platform are currently paused. According to the company’s statement, BlockFi has US$256.9 million in cash on hand, which is expected to provide sufficient liquidity to support certain operations throughout the restructuring process.
*Not investment advice.
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