Crypto Lender BlockFi Files for Bankruptcy, has $1bn to $10bn in Liabilities
Crypto lending company BlockFi has filed for bankruptcy, putting an end to its desperate attempt to raise funds in the midst of a steep liquidity crunch.
According to bankruptcy filings shared by Court Listener, the lender has filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of New Jersey.
In the filing, the company acknowledged that it had liabilities and assets ranging from $1 billion to $10 billion and more than 100,000 creditors.
The company was among the many crypto businesses that faced serious liquidity issues following the unprecedented collapse of cryptocurrency exchange FTX.
The list of largest unsecured creditors is topped by Ankura Trust (owed ~$729 million), which acts as the trustee for BlockFi’s interest-bearing crypto accounts. The second is FTX US, with a $275 million loan. Fourth is the SEC, to whom they still owe $30 million.
Speculation around the health of FTX and Alameda arose in early November as reports revealed that the investment firm’s balance sheet was loaded with FTT tokens, the native token of FTX. On November 11, FTX announced that it had filed for Chapter 11 bankruptcy in Delaware.
The collapse of FTX sent crypto prices into a free fall. Bitcoin has been trading around the $16,000 mark for the last couple of weeks, its lowest level in two years. The broader crypto market is also down by around 20% over the past month.
Notably, the FTX contagion has kept spreading over the past couple of weeks, most recently affecting crypto exchange Liquid, Genesis, and Gemini, along with BlockFi that has now filed for bankruptcy.
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