It’s now official: cryptocurrency lending service BlockFi and its subsidiaries are entering voluntary bankruptcy proceedings in the US. This is more collateral damage from the FTX collapse
It’s over for BlockFi
Rumors have been circulating for a few days, but now it’s official: BlockFi Group has filed for voluntary bankruptcy protection under Chapter 11 of the U.S. law:
Today, BlockFi filed voluntary cases under Chapter 11 of the U.S. Bankruptcy Code.https://t.co/adaAx6me4r
– BlockFi (@BlockFi) November 28, 2022
This proceeding involves BlockFi Inc. and the group’s eight other associated subsidiaries and also calls for the majority of employees to be laid off. The bankruptcy filing mentions at least 100,000 creditors and between 1 and 10 billion dollars under management.
As a reminder, on November 11, a few hours before the announcement of the bankruptcy of the FTX exchange, the loan and return company specialising in cryptos had announced the suspension of withdrawals for its users. Indeed, BlockFi would have taken out a $250 million loan in FTT, the FTX token whose value has since plummeted by 95%.
The statement said that the company will focus on repaying all its creditors, including the FTX group. Until further notice, withdrawals are still pending, but BlockFi says it has $256 million in cash that will be used to relaunch certain features.
