BlockFi Exploring Bankruptcy in Response to FTX Fallout: Report

BlockFi is on the lookout for solutions to its liquidity troubles brought on by its heavy publicity to FTX – and chapter is reportedly on the desk. 

• The crypto lending agency is already making ready a possible chapter submitting, individuals aware of the matter advised the Wall Street Journal. It’s additionally reportedly planning to put off employees – a standard follow for crypto corporations through the 2022 bear market. 
• BlockFi already paused buyer withdrawals and restricted exercise final week, citing the uncertainty round FTX’s monetary scenario. 
• Simply in the future later, FTX, FTX US, and Alameda Analysis filed for chapter. The as soon as top-tier crypto alternate reportedly faces an $8 billion shortfall in buyer deposits. 
• BlockFi already confronted liquidity hassle in June as contagion unfold from the collapse of Terra and its algorithmic stablecoin, UST, in Might. Two different crypto lenders – Celsius and Voyager – filed for chapter on the time. 
• An organization spokesperson advised CryptoPotato that there’s nothing official but however that the contagion from the FTX fallout is actual.
• BlockFi obtained a $250 million revolving credit score facility with FTX in June to assist it navigate these monetary points. In July, BlockFi’s CEO requested to not be in contrast to Celsius or Voyager, since these corporations had been frozen and bankrupt, whereas BlockFi was neither. 
• The lender supplied a statement on Monday saying that it nonetheless had the mandatory liquidity to “discover all choices” to assist restore funds for patrons. 
• Different exchanges and lenders are additionally freezing withdrawals following FTX’s collapse, together with Liquid World. Different corporations together with Huobi and Ikigai now have hundreds of thousands of {dollars} in property trapped inside the bancrupt alternate. 
• Former FTX CEO Sam Bankman-Fried reportedly sought extra funding from buyers over the weekend.