Summary:
- Crypto lender BlockFi declared bankruptcy on Monday after exposure to FTX.
- The company had some 100,000 creditors and around $256 million in cash when chapter 11 was filed.
- FTX backed the lender with a $250 million loan following Three Arrows Capital exposure.
Cryptocurrency lender BlockFi filed for chapter 11 bankruptcy on Monday following exposure to troubled crypto exchange FTX, the exchange founded by Sam Bankman-Fried.&
BlockFi held $256.9 million in cash when it filed for bankruptcy. The company also has around $1 billion in assets and liabilities alike. Per details of the filing, the lender boasts over 100,000 creditors including FTX US and the Securities and Exchange (SEC).&
The crypto lender reported $275 million in unsecured claims tied to FTX US. Notably, Sam Bankman-Fried’s exchange loaned $250 million to BlockFi back in June. At the time, BlockFi faced liquidity concerns after exposure to insolvent crypto hedge fund Three Arrows Capital (3AC).
Also, the lender owes $30 million to the SEC as part of a settlement agreement from February 2022. The largest creditor was Ankura Trust Company LLC with a $729 million claim.
BlockFi joined the chat
Celsius, FTX, Voyager, and now BlockFi all filed for bankruptcy in 2022 as the bear market unsettled crypto CeFi players. Hackers exploited loopholes in DeFi smart contract code, stealing billions from protocols, cross-chain bridges, and other decentralized finance solutions. Reports said October was the worst month for crypto hacks so far.
Nevertheless, the decentralized technology that backs digital assets jumped forward in leaps and bounds. Ethereum, the second largest blockchain behind Bitcoin, successfully deployed a major technological upgrade.
Blackrock and Google tapped crypto for services and offerings as well, signaling institutional interest.
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