BlockFi requests protection after FTX bankruptcy in the midst of the cryptocurrency crisis – Miami Diario
On Monday, cryptocurrency lender BlockFi filed for Chapter 11 bankruptcy protection as fallout from the collapse of cryptocurrency exchange FTX spreads.
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The request for protection was made in New Jersey, where its headquarters are located. He made a claim to more than 100,000 creditors, with BlockFi's liabilities ranging from $1 billion to $10 billion, Local 10 reported.
“Chapter 11 is a transparent process and we will continue to communicate with our customers to ensure they hear from us directly,” BlockFi said in a tweet.
Acting in the best interest of our clients is our top focus and continues to guide our path forward. Chapter 11 is a transparent process and we will continue to communicate with our clients to ensure they hear directly from us.
— BlockFi (@BlockFi) November 28, 2022
Likewise, this Monday cryptocurrencies fell back in what has already been a disastrous year, where Bitcoin has remained one of the most traded cryptocurrencies. It has plummeted nearly 70% in 2022 to less than $16 each.
BlockFi Inc
Recall that BlockFi Inc., which was founded in 2017, reported that bankruptcy protection will allow it to stabilize the company and restructure it.
That restructuring will include an attempt to recover all obligations owed to it by its counterparties, including FTX and associated corporate entities. BlockFi, which was bailed out by FTX from Sam Bankman-Fried early last summer, said it anticipates FTX's recoveries will be delayed.
Similarly, earlier this month FTX filed for bankruptcy and following its announcement BlockFi announced on Twitter that it was unable to conduct business as usual and was pausing client withdrawals as a result of the FTX implosion.
FTX collapse
“With the collapse of FTX, BlockFi's management team and board of directors took immediate action to protect customers and the company,” Mark Renzi of Berkeley Research Group, BlockFi's financial adviser, said Monday in a prepared statement.
It is not yet known what will happen after the fall of FTX.
There are already comparisons to the collapse of the famous Wall Street bank Lehman Brothers in 2008. The bank heavily trafficked in subprime mortgages that lost almost all their value and rocked the US and world economy.
BlockFi has $256,9 million in cash on hand, which it expects to provide enough protection to support some operations during the restructuring.
Miami Daily
Author: Monica Munoz 4:12 pm