Crypto lender BlockFi has filed for Chapter 11 bankruptcy protection.
According to the firm’s bankruptcy petition, BlockFi has claimed more than 100,000 creditors as well as between $1 billion and $10 billion in both assets and liabilities.
The petition discloses several major creditors. The biggest is Ankura Trust Company, LLC, which the petition says has an unsecured claim worth roughly $729 million. The next named creditors are FTX US and the Securities and Exchange Commission, which have unsecured claims of $275 million and $30 million, respectively.
The FTX US figure appears to stem from a credit line extended to BlockFi earlier this year, whereas the SEC’s settlement figure is related to a multi-party investigation settlement struck with state and federal regulators in February.
BlockFi has US$256.9 million in cash on hand, which is expected to provide sufficient liquidity to support certain operations during the restructuring process, according to a press release issued when BlockFi filed for Chapter 11 protection.
“With the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the Company,” said Mark Renzi of Berkeley Research Group, the company’s financial advisor. “From inception, BlockFi has worked to positively shape the cryptocurrency industry and advance the sector. BlockFi looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders.”
BlockFi announced earlier this month that it had paused withdrawals. Just days before, as Binance weighed buying FTX, BlockFi said its products were “fully functional.”
Last week, BlockFi has put client loans into forbearance, according to a customer email viewed by The Block.
BlockFi’s bankruptcy petition can be found below:
Petition by Mike McSweeney on Scribd
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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