Following the collapse of FTX, BlockFi has officially filed for bankruptcy after several days of assumption on the company’s financial health and liquidity issues.
BlockFi Files For Bankruptcy
On November 28, BlockFi and eight of its affiliates announced that it had filed for Chapter 11 bankruptcy protection. According to a BlockFi press release, the company has $256.9 million in cash on hand and is expected to provide sufficient liquidity to support certain operations during the restructuring process.
BlockFi has more than 100,000 creditors, as well as $1 billion to $10 billion in assets and liabilities. The petition lists several major creditors, including Ankura Trust Company, LLC. The company’s unsecured claim is valued at roughly $729 million, according to the petition. West Realm Shires, the company publicly known as FTX.US, and the Securities and Exchange Commission also have unsecured claims worth $275 million and $30 million, respectively.
The company’s financial advisor, Mark Renzi, stated that with the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the company. Moreover, Renzi expressed that from its inception, BlockFi has worked to positively shape the cryptocurrency industry and advance the sector. The company also looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders.
BlockFi Significant Exposure To FTX
As the bear market intensified earlier this year, the cryptocurrency lender’s troubles began especially after the collapse of Terra. In June, BlockFi announced a $250 million line of credit with FTX that further supports its balance sheet and platform strength.
On November 11, after FTX filed for bankruptcy, BlockFi announced that it would pause withdrawals and customer deposits on its platform. BlockFi acknowledged that they have significant exposure to FTX and its associated corporate entities, which include obligations owed to BlockFi. They also have assets held on the platform, as well as an undrawn line of credit from FTX.
FTX’s financial troubles are spreading to other crypto companies. Other crypto firms exposed to the bankrupt crypto exchange also include Gemini and Genesis.