BlockFi Declares Bankruptcy As FTX Fallout Spreads

Struggling businesses don't always choose bankruptcy. They can try negotiating with creditors directly or liquidating assets outside the U.S courts.

Cryptocurrency lender BlockFi filed for Chapter 11 bankruptcy protection on Monday along with eight affiliates as contagion from the collapse of cryptocurrency exchange FTX spreads across the industry.

Key Takeaways

  • BlockFi filed for bankruptcy on Nov.28 along with eight affiliates.
  • Earlier in the month, BlockFi had to pause withdrawals after the FTX collapse.
  • The platform has started laying off employees.

Earlier this month, the New Jersey-based platform paused withdrawals after announcing that it was preparing for bankruptcy due to its "significant exposure" to the bankrupt crypto exchange FTX. FTX bailed out BlockFi this year with a $400 million revolving credit facility and an option to buy it for up to $240 million. Now the crypto lender's CEO has resigned, and it is laying off much of its staff.

FTX's sinking ship isn't only bringing down BlockFi. There are a large number of companies exposed to FTX. Other crypto firms, such as Gemini and Genesis, have also been affected by FTX.

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  1. BusinessWire. ''BlockFi Commences Restructuring Proceeding to Stabilize Business and Maximize Value for all Clients and Stakeholders''
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