Crypto: BlockFi could be FTX's next collateral victim

On November 8, the crypto lender said: “ BlockFi is an independent commercial entity. We have a $400 million line of credit with FTX.US (not and will remain an independent entity until at least July 2023“. But, the company later suspended withdrawals, and today it is announcing its bankruptcy filing.

A process to stabilize the crypto lender’s business

According to a official announcement, crypto lender BlockFi is now bankrupt. It appears that the company and eight of its subsidiaries have filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. This was done in the United States Bankruptcy Court for the District of New Jersey. BlockFi thus wishes “ stabilize its activities and give the Company the possibility of carrying out a complete restructuring operation.An operation that maximizes value for all customers and other stakeholders“.

As part of its restructuring efforts, the Company will focus on collecting all obligations owed to BlockFi by its counterparties, including FTX and related corporate entities. Due to the recent collapse of FTX and the ensuing bankruptcy process, which is still ongoing, the Company expects collections from FTX to be delayed.“, can we read in the announcement.

The announcement made by BlockFi

In addition, BlockFi explained that it has always worked to have a positive impact on the cryptosphere and contribute to its growth. The company has emphasized that it wishes that the restructuring process takes place in full transparency. She would likeachieve the best outcome for all customers and other stakeholders“.

Sufficient liquidity to“certain restructuring operations”

The crypto lender clarified that activity on its platform remains halted until further notice. He added : “BlockFi has $256.9 million in liquidity, which should provide enough liquidity to support some operations during the restructuring process“.

In addition, the company would like toensure a smooth transition to Chapter 11“. To this end, she filed requests to stay in business. Among these requests are:requests to pay employee wages and maintain employee benefits without interruption“.

After several days of turbulence, following the bankruptcy of FTX, BlockFi files for bankruptcy. The company now plans to handle customer complaints through the Chapter 11 process.

Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of newsletter daily and weekly so you don’t miss any of the essential!

Similar Posts