Following the demise of FTX, BlockFi has officially declared bankruptcy, following several days of speculation about the company’s financial health and liquidity issues.
BlockFi and eight of its affiliates filed for Chapter 11 bankruptcy protection on November 28.
According to a BlockFi press release, the company has $256.9 million in cash on hand, which will be enough to support certain operations during the restructuring process.
BlockFi has over 100,000 creditors, with assets and liabilities ranging from $1 billion to $10 billion. Ankura Trust Company, LLC, is among the major creditors named in the petition.
According to the petition, the company’s unsecured claim is worth approximately $729 million.
West Realm Shires, also known as FTX.US, and the Securities and Exchange Commission have unsecured claims in the amount of $275 million and $30 million, respectively.
Mark Renzi, the company’s financial advisor, stated that following the failure of FTX, the BlockFi management team and board of directors acted immediately to protect clients and the company.
Furthermore, Renzi stated that BlockFi has worked to positively shape and advance the cryptocurrency industry since its inception.
The company also anticipates a transparent process that results in the best possible outcome for all clients and other stakeholders.
As the bear market intensified earlier this year, the cryptocurrency lender’s problems began, particularly after Terra’s demise.
BlockFi announced a $250 million line of credit with FTX in June, bolstering its balance sheet and platform strength.
After FTX declared bankruptcy on November 11, BlockFi announced that it would halt withdrawals and customer deposits on its platform.
BlockFi admitted that they have significant exposure to FTX and its associated corporate entities, including obligations owed to BlockFi.
They also have assets on the platform and an undrawn line of credit with FTX.
Financial difficulties at FTX are spreading to other cryptocurrency companies. Gemini and Genesis are two other crypto firms that have been impacted by the bankrupt crypto exchange.