Crypto Lending Platform BlockFi Files For Chapter 11 Bankruptcy

Crypto Lending Platform BlockFi Files For Chapter 11 Bankruptcy
  • Several layoffs and withdrawal halt were witnessed on a regular basis post-FTX crash.
  • More than 100,000 people are listed as creditors in the bankruptcy petition.

A series of tragic incidents have unfolded over the last several weeks in the realm of cryptocurrency. After the FTX collapse, many in the crypto community were terrified. Several layoffs and withdrawal halt was witnessed on a regular basis.

The cryptocurrency lending platform BlockFi was hit hard by the decline of FTX. While the dust settled, BlockFi suspended withdrawals on their platform. There were rumors that BlockFi was making bankruptcy plans. The worst fears have been realized as the crypto lender has formally filed for bankruptcy.

Struggle Continues For Investors

In light of current information, BlockFi and eight of its subsidiaries have filed for Chapter 11 bankruptcy protection. The lender’s obligations in the bankruptcy petition are likewise in the billions. More than 100,000 people are listed as creditors in the bankruptcy petition for the crypto lender in financial distress. Both the assets and the liabilities are shown to be between $1 billion and $10 billion.

In addition, the petition shows that BlockFi owes FTX US $275 million. The details reveal that it had substantial exposure to FTX. It’s important to remember that BlockFi was in significant financial trouble when FTX purchased the firm in July of this year. Previously, there was an $80 million loss to the platform due to the demise of Three Arrows Capital.

Moreover, the lender, however, seems to have been negatively impacted by the FTX collapse. Sadly, it’s just another crypto corporate failure. Following the downfall, FTX CEO SBF resigned and the firm filed for Chapter 11 bankruptcy.

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