BlockFi Files For Bankruptcy, Cites FTX Collapse For Problems

The crypto lender has already been "rescued" by FTX following the collapse of Terra's stablecoin.

BlockFi announced on Nov. 28 that it had filed for Chapter 11 bankruptcy. The filing in the United States Bankruptcy Court for the District of New Jersey involves the company and its eight subsidiaries. The move comes after several days of speculation about the company's financial health following the collapse of FTX.

According to a statement, BlockFi has $256.9 million. He filed motions "to pay employee wages and maintain benefits without interruption." It also seeks to "establish a retention plan for key employees to ensure the company retains internal resources trained for critical business functions" and has created an internal plan to reduce expenses.

BlockFi International has also filed for bankruptcy with the Bermuda Supreme Court, according to the statement.

Today, BlockFi filed voluntary filings under Chapter 11 of the US Bankruptcy Code.https://t.co/adaAx6me4r

FTX US received a $400 million line of credit at the end of June, raising fears after FTX's collapse that BlockFi's exposure could send it into a crisis. liquidity. BlockFi halted withdrawals on November 11. In an update on its website, the company writes:

"Since the break, our team has explored all strategic options and alternatives available to us, and has remained focused on our primary goal of doing the best we can for our clients. These Chapter 11 cases will allow BlockFi to stabilize the business and provide BlockFi with the ability to implement a reorganization plan that maximizes value for all stakeholders, including our valued customer...