Crypto Company BlockFi Files for Bankruptcy Amid FTX Fallout
Two weeks ago, news broke that the crypto giant, FTX, had completely crumbled. Now, BlockFi has followed suit.
According to Yahoo Finance, the three largest creditor claims BlockFi revealed in its petition are “a $729 million indenture from Ankura Trust, a distressed loan administration company, a $275 million loan from West Realm Shires, the holding company for FTX’s US subsidiary, as well as a $30 million settlement payment to the U.S. Securities and Exchange Commission.”
BlockFi announced on Nov. 10 that customer withdrawals were halted and advised customers to not make any deposits. The company followed up on Monday and stated that activities would continue to be paused.
According to NPR, the crypto industry has been suffering through a “winter” where almost every area is being affected.
BlockFi was especially feeling the effects of the “winter” due to its “significant exposure to FTX and associated corporate entities,” CEO Zac Prince and COO Flori Marquez, the company’s co-founders, said in a letter to customers.
BlockFi and FTX partnered up during the summer. NPR reported, “FTX agreed to provide BlockFi with a $400 million revolving credit facility, to use as a backstop, in exchange for the option to buy the company for as much as $240 million.”
BlockFi cut about 20% of its staff in June after seeing an “uptick of customers withdrawals” when the crypto lending platform, Celsius, filed for bankruptcy and the loss of $80 million when Three Arrows Capital, a crypto hedge fund, collapsed, per NPR.
