US-based cryptocurrency lending platform BlockFi announced that it ceased operations after the bankruptcy of FTX. On Twitter, the company posted, “We are shocked and dismayed by the news regarding FTX and Alameda. We, like the rest of the world, found out about this situation through Twitter.” Later, in a news piece by The Wall Street Journal, it was stated that BlockFi, which was financially intertwined with the global crypto asset platform FTX, was considering filing for bankruptcy and laying off employees.
On Monday, November 28, BlockFi announced that it 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. According to the statement made by BlockFi, the company has $256.9m. On the other hand, the company made proposals for the payment of salaries and the continuation of employee benefits without interruption.
BlockFi made the following statement:
“Since the pause, our team has explored every strategic option and alternative available to us, and has remained laser-focused on our primary objective of doing the best we can for our clients. These Chapter 11 cases will enable BlockFi to stabilize the business and provide BlockFi with the opportunity to consummate a reorganization plan that maximizes value for all stakeholders, including our valued clients.”
BlockFi, which offers not only trading cryptocurrency, but also interest-bearing deposits and loans in crypto assets, experienced a liquidity squeeze due to the depreciation of cryptocurrencies, and the company escaped bankruptcy by making a $400m credit agreement with FTX in July.
