Crypto lending platform BlockFi has announced the launch of bankruptcy proceedings under the 11th chapter of the US Bankruptcy Code, which will allow it to ensure the stabilization of the business and complete the reorganization process. BlockFi has $256.9 million in its accounts, which is expected to provide the company with sufficient liquidity to support certain operations in the restructuring process.
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Cryptocurrency platform operator BlockFi International Ltd., based in Jersey City, New Jersey and registered in Bermuda, positions itself as a lending organization aimed primarily at small investors, offering them crypto-backed loans in minutes without credit checks, as well as allowing you to open accounts for deposits in cryptocurrency, which paid high interest. As of the end of last year, it had over 450,000 private clients, according to BlockFi.
Bankruptcy filing for BlockFi International Ltd. and eight affiliated organizations filed in the United States Bankruptcy Court for the District of New Jersey. At the moment, all operations on the platform are suspended. The company plans to focus on recovering all of its counterparties’ obligations to BlockFi, including FTX and its related entities.
Due to the fall in the cryptocurrency market, BlockFi entered into a deal with FTX in June, in which it agreed to provide the company with a $400 million credit line. According to the bankruptcy filing, BlockFi subsequently borrowed $275 million from a subsidiary of FTX.
BlockFi has indicated in court documents that it has about 100,000 creditors. BlockFi’s largest debt to the Ankura trust company is $729 million. In addition, BlockFi owes $275 million to West Realm Shires (FTX US) and $30 million to the US Securities and Exchange Commission.
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