Cryptocurrency lender BlockFi files for bankruptcy protection
The filing follows BlockFi’s announcement earlier this month that withdrawals had been halted.
According to the company’s bankruptcy case, BlockFi has more than 100,000 creditors and assets and liabilities between $1 billion and $10 billion.
The petition lists numerous significant creditors. The petition states that Ankura Trust Company, LLC has an unsecured claim of about $729 million. The next creditors listed are FTX US and the Securities and Exchange Commission, with respective unsecured claims of $275 million and $30 million.
The FTX US amount seems to refer to a credit line given to BlockFi earlier this year, whilst the SEC’s settlement sum relates to a multi-party investigative resolution reached in February with state and federal authorities.
According to a press statement published when BlockFi filed for Chapter 11 protection, the company has a cash balance of $256.9 million, which should provide adequate liquidity to maintain some activities throughout the reorganization process.
“With the collapse of FTX, the BlockFi management team and board of directors took fast action to safeguard customers and the firm,” stated Mark Renzi, the company’s financial adviser at Berkeley Research Group. Right from the start, BlockFi has been actively contributing to the growth and development of the cryptocurrency industry. BlockFi anticipates a transparent procedure that yields the greatest results for all customers and other stakeholders.”
BlockFi announced the suspension of withdrawals earlier this month. Just days before, when Binance was contemplating acquiring FTX, BlockFi said that its devices were “completely working.”
According to a customer email received by The Block, BlockFi placed client debts into deferment last week.